Making Financial Headlines · Page 6
AMD's Server Forecast Makes Analysts Forget Their Indoor Voices
· New York time
Advanced Micro Devices reported strong third-quarter revenue and earnings and offered a bullish forecast for server growth, impressing analysts. The results gave the chipmaker a favorable assessment on both its recent performance and its outlook for a business central to computing infrastructure. Server chips help power the machines that run data centers and business computing services. Demand for those systems is important to the companies that design the components, as well as to customers deciding how much computing capacity to purchase. A forecast of growth is encouraging for investors, though it remains a forecast rather than revenue already collected. AMD's quarter beat Wall Street expectations on the top and bottom lines, giving analysts a reason to review the business with more enthusiasm. The server outlook adds a forward-looking component to that assessment. Future orders will determine how much of the projected strength ultimately appears in results. The company has managed a rare corporate double: deliver numbers the market likes and offer a forecast that gives analysts something else to applaud. Both are useful, but they are not the same item on the balance sheet. For now, the server rack is the star of the earnings presentation. The analysts are delighted, the forecast is bullish, and the hardware has once again demonstrated that a very large box can generate a very large amount of excitement.
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