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AMD Stock Rises on Q1 Earnings Beat and 7 nm Product Update

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May. 1 2019, Published 1:23 p.m. ET

AMD soars 8% after its earnings release

Advanced Micro Devices (AMD) stock soared as high as 8% in the after-hours trading session on April 30 after the company’s first-quarter earnings and guidance beat estimates.

The stock also soared as the company’s CEO, Lisa Su, provided an update on the launch of its 7 nm products, which will put it ahead of Intel (INTC) in the process technology node space.

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7 nm product update

Su confirmed that AMD would start shipping its second-generation Rome EPYC server CPUs (central processing unit) in the second quarter, with a volume launch expected in the third quarter. She believes the new CPU will help the company gain a double-digit share in the server CPU market by the end of 2019. AMD’s EPYC sales rose sequentially in the first quarter, whereas Intel’s data center sales fell 19.3% sequentially.

Su also confirmed that AMD is set to launch its next-generation 7 nm Navi GPU (graphics processing unit) in the third quarter. She didn’t provide many details except for the fact that the first Navi GPU will have a lower price than the $699 Radeon Vega VII GPU. She added that the company will launch its 7 nm Ryzen PC CPUs later this year but didn’t provide an exact date. Intel plans to launch its 10 nm laptop CPUs later this year.

AMD will manufacture all of its 7 nm products on TSMC’s (TSM) node. AMD’s announcement sent TSMC stock up 1.4% in the April 30 after-hours trading session.

First-quarter earnings

Although AMD reported YoY (year-over-year) falls in its first-quarter earnings and its second-quarter guidance, both beat analysts’ estimates, which was a big positive for AMD investors, as its rival Intel had reported weaker-than-expected second-quarter guidance.

Moreover, AMD maintained its 2019 guidance of 8% YoY revenue growth, whereas Intel lowered its 2019 guidance from a 1% YoY revenue rise to a 2.5% YoY revenue fall. AMD is up 52.7% year-to-date and has the potential to rise further on market share gains.

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