Graphics chip creator Advanced Micro Devices (NASDAQ:AMD) is having an incredible time this year. The stock has picked up nicely, determined by increased interest for its chips that are used in Microsoft (MSFT) and Sony's (SNE) gaming consoles.
The great times should proceed
In the first quarter, AMD saw solid interest from Microsoft and Sony's diversion consoles, which have outpaced the previous era devices. This prompted a strong demand in its chip business. The organization credits the success of its products to its interesting IP and design expertise. Going ahead, management is certain about proceeding with strength in its chip business. This segment is among the reasons why AMD should issue a strong outlook going forward.
AMD is seeing strong development in its installed business because of interest from strategic business makers in key verticals such as computerized signage, medicinal and so forth. Moreover, this segment has strong margins, and item cycles can stretch up to as long as five years in this space. Thus, embedded solutions are a consistent source of revenue for AMD.
AMD's dense server business is also picking up footing, and its piece of the pie continues to increase. Verizon (VZ) is one of the well-known clients of the organization, which uses AMD's Seamicro-based dense servers that are fueling the world's largest open cloud solution. As per reports, it is expected that the dense server business sector will be around 25% of the general server market by 2019. Going ahead, AMD intends to lead this transition with its one of a kind fabric engineering and 64-bit processors.
The chip producer as of late propelled its first 64-bit ARM server processor, which is actually the industry's first at 28-nanometer innovation. This provides AMD an advantage since it is the main system-on-a-chip (Soc) supplier to scaffold the x86 and ARM ecosystems for server applications.
PCs and gaming to improve
Plainly, AMD is experiencing tailwinds in several businesses. Then again, it is confronting challenges in the PC business. Despite the fact that PC sales are stabilizing, it will set aside some time for the business to get momentum. AMD now expects general PC shipments to decline in the range of 7% to 10% in 2014, with the rate of decline dropping.
All things considered, management is pleased with AMD's progress. Going ahead, it will continue to focus on key item areas, which is a part of its long haul development strategy. Its first-quarter results indicate that it is progressing well in fabricating the strong establishment needed to convey consistent profitability and revenue development, and the same should keep going ahead. The PC business sector is stabilizing while console development is also improving rapidly.
Subsequently, the long haul prospects for AMD also look solid. The console cycle is still in its initial stage, and since AMD's chips are used by both Sony and Microsoft and so, it is on track to profit from both companies.
AMD has done well so far, and considering the prospects in its end-market, it is exceptionally likely that it will have the capacity to proceed with its solid run going ahead. The organization looks set to report a solid earnings report, and its viewpoint should also be impressive. Consequently, investors should keep holding AMD going into earnings.