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AMD Stock Rises as CEO Denies Rumors of Joining IBM

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Advanced Micro Devices (AMD) stock rose over 3% yesterday after its CEO denied rumors that she was leaving the company. Yesterday, Lisa Su announced in a tweet, “Just for the record, zero truth to this rumor. I love @amd, and the best is yet to come!” Su also stated that the rumors that she was joining IBM (IBM) in a top position were incorrect.

The rumors started making the rounds after an article published by tech news site WCCFTech pointed out that Su was planning to move from AMD this fall. The report also mentioned that she’d be taking on the role of IBM’s president and CEO, replacing Ginni Rometty. The article even named the next possible successor after Su’s exit: Rick Bergman, who’s currently heading AMD’s PC and Semi-Custom segment. AMD recently hired Bergman from Synaptics, where he’d served as CEO.

AMD stock rose 3.1% to $28.86 yesterday. On a year-to-date basis, AMD is up more than 56%.

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AMD’s weak second-quarter results

AMD has lost more than 14% since it lowered its revenue forecast for the year on July 30. AMD also posted a double-digit decline in both earnings and revenue in its second quarter. The company saw a fall in graphics channel sales and semi-custom sales in the quarter, but its PC-related product sales improved.

For 2019, AMD now expects its revenue to rise in the mid-single digits. Earlier, the company had anticipated high-single-digit sales growth for the year.

AMD’s upcoming launches

AMD is set to unveil its second-generation EPYC Rome server processors on August 7. The new processors are expected to gain market share amid heightened interest from enterprise and cloud customers. According to Su, the upcoming EPYC Rome processors are likely to ramp up the company’s sales significantly. Moreover, she believes that the processors will generate sales faster than AMD’s first-generation server CPUs.

They’re also likely to challenge rival Intel’s (INTC) second-generation Xeon scalable processors, which launched in April. Intel’s processors, which are part of the Xeon Scalable Platinum 9200 series, offer up to a 30% price-performance increase at volume. Intel’s new processors are also capable of meeting high-performance workloads such as those associated with AI technology.

During the second quarter, AMD also revealed its next-generation 7 nm (nanometer) Ryzen 3000 series CPUs and EYPC server CPUs to rival Intel’s current 14 nm CPUs. AMD should see a revenue boost from its new EPYC processors as well as its new Ryzen 3000 desktop processors and Radeon RX graphics processing units.

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