Analyst Mitch Steves, who reiterated his outperform rating on AMD, said in a note to investors that he saw improving demand for data-center products. He said that while AMD's prospects in 2021 are "admittedly unclear," 2020 has become more attractive. He added that the company's competitive edge will not see a change of competition in a meaningful way until around the end of the third-fourth quarters.
Last month, AMD reported mixed third-quarter results and fourth-quarter guidance. Adjusted earnings 18 cents a share, in line with Wall Street expectations. Revenue was $1.8 billion, just below estimates of $1.809 billion.
Computing and graphics revenue, the company's largest segment, was $1.28 billion, beating estimates of $1.127 billion and rising 36%. Enterprise embedded and semi-custom revenue was $525 million, down 27% and below estimates of $695 million. Gross margin was 43%, better than the 40% in the year-ago quarter and in line with Wall Street's estimate.
The company guided for revenue of $2.1 billion in the fourth quarter, plus or minus $50 million, missing analysts estimates of $2.149 billion. Gross margin guidance for the current quarter was 44%, better than analysts expected 43%.
AMD on Thursday unveiled the first third-gen chips for its Threadripper HEDT CPU family: A 24-core product known as the Threadripper 3960X, and a 32-core product known as the Threadripper 3970X. With list prices of $1,399 and $1,999, the 3960X and 3970X cost $100 and $200 more, respectively, than the 24-core and 32-core offerings within the second-gen Threadripper line that launched last year.