AMD announced that in the third quarter of 2020, revenue hit a new high of $2.8 billion, net profit reached $390 million, a surge of 225%, and adjusted earnings per share were 41 cents, much higher than the 18 cents in the same period last year.
AMD not only released a better-than-expected third-quarter financial report, but also raised its revenue forecast for the current quarter. Even Bloomberg has a view that AMD has thrown Intel away, and the stock has easily surpassed it in the past two years. While Intel blamed the weak economy for poor data center and server sales, AMD said data center business was strong, with server chip sales more than doubling from the same period.
AMD is clearly eroding Intel’s market share, and this trend won’t change anytime soon. Because Intel’s 7nm process is not smooth, it may take some time to get back on its feet. However, for such a good situation, the market does not seem to pay much, and the stock price has fallen. The main reason may be that AMD will acquire Xilinx. Although it is expected to further strengthen AMD’s competitiveness in the data center market, there are still many opinions that this is too risky.
Some analysts still take a wait-and-see attitude. Although they agree that this acquisition will help AMD stabilize the data center market, the benefits may not be so high. As the economy continues to weaken, how to maintain Xilinx’s revenue growth in the future will be difficult. Small challenges, AMD’s move can be described as too opportunistic, and may even distract Su Zifeng’s energy. At present, AMD said that after the acquisition of Xilinx, Su Zifeng will still be the CEO of the new company.
However, Su Zifeng said in the conference call that he is still quite optimistic about the development of cloud services in the future. In edge computing, we have seen growing demands such as HPC. Both of them have considerable technical advantages, and they are common and complementary to AMD’s technology development methods. After the combination of the two parties, they will be able to provide a first-class product portfolio in the market.
It’s worth noting that while analysts largely agree that there are benefits to combining the two, and that AMD is effectively differentiating by adding FPGA technology to their chiplet architecture, it’s Nvidia that really needs to buy Xilinx. In any case, Wall Street agrees that Intel is in a precarious position today, lacking the leadership skills that Su and Huang have.