AMD Sees Highest Q3 Revenue In Over A Decade With Booming 7nm EPYC And Ryzen CPU Sales

AMD Building in Texas
To say AMD is doing well these days is a bit of an understatement, like saying Larry Bird was an okay basketball player back in the day. So, how is AMD really doing? Bolstered by its latest generation Ryzen desktop and EPYC server processors, AMD just capped off its most lucrative quarter in over a decade, with $1.8 billion in revenue.

That figure represents 9 percent year-over-year increase, and you can double that percentage gain to 18 percent if comparing to the previous quarter, which yielded $1.53 billion in revenue. After paying the bills, AMD was left with a $219 million profit for the third quarter of 2019, compared to $150 million in the same quarter a year ago.

"Our first full quarter of 7nm Ryzen, Radeon, and EPYC processor sales drove our highest quarterly revenue since 2005, our highest quarterly gross margin since 2012, and a significant increase in net income year-over-year," said Dr. Lisa Su, AMD president and CEO. "I am extremely pleased with our progress as we have the strongest product portfolio in our history, significant customer momentum and a leadership product roadmap for 2020 and beyond."

AMD's decision to essentially go all-in with 7nm manufacturing is paying off. Both the company's Zen 2 CPUs and Navi GPUs are built on a 7nm node, and between the two, they serve practically every processor and graphics segment. We say "practically every" segment, because there are still untapped markets for AMD's 7nm tech, such as mobile CPUs for laptops. The latest unofficial chatter points to those releasing in early 2020, possibly at CES.

As things stand, however, AMD is seeing growth in several areas. It's Computing and Graphics segment earned the lion's share of revenue at $1.28 billion in Q3, up 36 percent year-over-year and sequentially, while its Enterprise, Embedded, and Semi-Custom segment revenue jumped 27 percent year-over-year (and 11 percent sequentially) to $525 million.

What these numbers all mean is AMD finds itself on solid footing. This has been the case for a few quarters now, though the third quarter really hammers home the success AMD is seeing with its latest generation products.

Even so, investors are staying cautious. After closing at $33.03 on Tuesday, which is up 79 percent year-to-date, AMD's stock price dipped slightly in after market hours to $31.64. Part of the reason is AMD's forecast of around $2.1 billion (plus or minus $50 million) for the fourth quarter is slightly soft compared to expectations.

We don't give investment advice, as that is not our of expertise. However, we will point out that $2.1 billion in revenue would represent a 48 percent year-over-year gain, and 17 percent sequentially, if that figure comes to pass. So regardless of how the stock fares, from our vantage point, AMD appears to be in excellent shape going forward.