AMD has saturated revenue growth in the first quarter of 2021

AMD reports a decent sales growth of 93 percent in the first quarter in all segments. In particular, sales of chips for game consoles rose to more than $3.4 billion.

Optimism due to “best portfolio”

By the current figures AMD is very optimistic about the rest of the year. The company aims to significantly surpass the $10 billion revenue mark. In contrast to the fourth quarter of 2020, sales only increased by six percent, but the comparison to the previous year in the first quarter shows a huge increase.

Due to the tax adjustments at the end of last year, AMD had also been able to make up quite a bit in net profit in 2020. The company was not able to repeat this “outlier”, but with a profit of 555 million US dollars, it achieved the best result in years. The operating result was also positively influenced by the increased sales, which now stood at 662 million US dollars. The first quarter of 2020 always serves as a comparison here, where AMD was able to significantly improve all business areas and also reduce the debt mountain by 313 million.

AMD CEO Dr. Lisa Su particularly blames the “best product portfolio in our history” and the “robust market demand” for the very positive development of the company. As a result, more products were successfully sold. Especially the division around Ryzen and Radeon paid off, these sell better and also more expensive. The Ryzen processors and Radeon graphics cards increased by 46 percent and sold a total of $2.1 billion. This is an increase of another seven percent compared to the end of 2020. The company was able to sell the products better and also at higher selling prices.

In the notebook processors, there was also now the sixth quarter in a row another sales record. This includes Ryzen 5000 based on the Cezanne APU since this year.

286 percent growth in processors for consoles

AMD achieved the greatest growth in the Enterprise, Embedded and Semi-Custom segment, up an incredible 286 percent. The company attributes these numbers to increased sales in semi-custom products and increased sales of Epyc processors. However, this increase is more likely to be due to the matching processors for the gaming consoles. Since the sales for the processors for the Xbox Series X/S and PlayStation 5 shot up from 348 million US dollars at the beginning of last year to a whopping 1.35 billion US dollars in the meantime.

This was already somewhat foreseeable in the last quarter of 2020, when the sales launch of the consoles began. AMD justifies the further increase in sales by five percent with the Epyc processors since the sales of semi-custom products have now decreased again somewhat. Just recently, a new generation of Epyc 7003 server processors was launched.

Ambitious targets for 2021

AMD is now looking to make further gains in the second quarter and achieve revenue in the $3.6 billion range, while targeting a gross profit margin of 47 percent. For the full year 2021, the company has set a goal of achieving 50 percent year-over-year revenue growth. For comparison, in 2020, revenue was $9.763 billion, so the target for 2021 is approximately $14.6 billion. That would be the highest revenue for AMD in the company’s 50-year history.

Due to the current development and the ambitious goals of the company, AMD has also provided upward momentum in after-hours trading. AMD’s share price rose by three percent after the close of trading. However, the company’s estimates are still rough and can only be seen as an approximate assessment of the development.