Advanced Micro Devices Inc. (AMD), known as AMD, is a global semiconductor company providing central processing unit (CPU), graphics processing unit (GPU), chipsets, and similar computing products. The company's products are used in a variety of computing platforms including in desktop, notebook, and commercial applications, as well as for graphics processing, server processors, and more. AMD's products also play an important role in blockchain applications.

Major competitors for AMD include Intel Corp. (INTC) and NVIDIA Corp. (NVDA). Other computing and technology companies are less specialized in the semiconductor area but still have overlapping offerings, making them competitors, such as International Business Machines Corp. (IBM).

Key Takeaways

  • AMD is a global semiconductor company providing processing units, chipsets, and similar products.
  • The fastest-growing segment is Enterprise, Embedded, and Semi-Custom products.
  • AMD has experienced solid growth in its two major segments in recent quarters.
  • In May 2021, AMD announced a $4 billion stock buyback program.

AMD's Financials

AMD announced in late July financial results for Q2 of its 2021 fiscal year (FY), the three-month period ended June 26, 2021. Net income rose 352.2% year over year (YOY) to $710 million. Net revenue was $3.9 billion, growing 99.3% compared to the year-ago quarter. Total operating income, which AMD uses to measure profit in its individual business segments, increased 380.3% YOY to $831 million.

In its earnings press release for the quarter, AMD noted that its operating margin, a measure of how efficiently a company is able to generate profit through its core operations, doubled compared to the year-ago quarter. The company said that it was seeing strong demand across all of its businesses and expects its FY 2021 annual revenue to grow by approximately 60%.

AMD's Business Segments

AMD breaks down its revenue and operating income into two segments: Computing and Graphics; and Enterprise, Embedded, and Semi-Custom. The company also has an All Other category, which is not a reportable segment and primarily includes employee stock-based compensation expenses and acquisition-related costs. Percentages for operating income in the pie chart and in the story below do not include the All Other category, which had an operating loss of $93 million in Q2 FY 2021.

Computing and Graphics

The Computing and Graphics segment includes desktop and notebook processors and chipsets as well as GPUs. This segment also includes AMD's data center and professional products and development services.

AMD's Computing and Graphics segment posted $2.3 billion in revenue for Q2 FY 2021. This represented over 58% of total revenue for the quarter. Operating income for the segment for the same period was $526 million, accounting for nearly 57% of total operating income. Segment quarterly revenue and operating income grew by 64.6% and 163.0% YOY, respectively.

Enterprise, Embedded, and Semi-Custom

AMD's Enterprise, Embedded, and Semi-Custom segment includes server and embedded processors, System-on-Chip products, and various services and technology for game consoles.

Enterprise, Embedded, and Semi-Custom segment revenue was $1.6 billion for Q2 FY 2021. This represents nearly 42% of total revenue for the quarter. Operating income was $398 million for the quarter, or 43% of total operating income. Enterprise, Embedded, and Semi-Custom was the fastest-growing of AMD's segments in Q2 FY 2021, with revenue and operating income climbing by 183.2% and 1106.1% YOY, respectively.

AMD's Recent Developments

In its Q2 FY 2021 press release, AMD noted that it announced a $4 billion share repurchase program in May. The company repurchased 3.2 million shares of common stock for $256 million during the quarter.