Few investors should be surprised that AMD would post strong results in the last quarter. The company reported revenue growing by 49.1% Y/Y to $4.83 billion. It posted non-GAAP EPS of 92 cents.
For Q1/2022, AMD expects revenue of around $5 billion, up by 45% Y/Y. Business demand will drive its growth. For the full year 2022, AMD expects revenue to grow by 31% Y/Y to $21.5 billion.
In the quarter, AMD increased shareholder value by buying back $756 million in stock buybacks. IT bought $1.8 billion of shares for the year. That action suggests that CEO Su is too conservative in the 2022 forecast. AMD’s revenue could surpass $23 billion. The gross margin is expanding. AMD has strong pricing power. It could raise prices to maximize gross margins.
The chip shortage empowers suppliers like AMD. Companies need the latest EPYC server chip. Gamers want the most powerful high-end Ryzen CPU. Although Intel’s (INTC) Alder Lake is competitive, AMD may sell its comparable Ryzen 7 chip at higher prices.
At the macro level, higher interest rates are not a concern. AMD reduced debt and increased its cash on hand. Expect the chip shortage to continue for the next two years. Those conditions will keep AMD’s CPU, graphics card, and server chips at a price premium.
