AMD’s data center solutions segment is growing at a record pace

In a recent report by processor manufacturer Advanced Micro Devices Inc. (AMD), one of the most important parts was data on the sale of processors for data centers (data centers). AMD has high growth rates in this segment, which is a positive signal for long-term investors. AMD announced the quarterly results on Tuesday, August 2, after trading. The company’s revenue grew by 70% year-on-year to $6.55 billion. A significant role in acquiring the business of the manufacturer of chips for Xilinx network devices, among other things, provided AMD with an increase in sales of data center solutions by 83% year-on-year. 

However, AMD itself is successfully selling its EPYC server processors, which brought revenue of $ 1.49 billion last quarter. AMD is currently in the process of updating its structure and corresponding reporting updates. In particular, a separate segment of solutions for data centers will appear. Previously, data center chips were part of the general segment of business solutions. Thus, AMD’s reports will soon better show the solid positive dynamics of the data center solutions segment, which may attract the attention of a wide range of investors. 

The operating margin of AMD’s data center solutions segment is high (more than 30%), which means that the rapid growth of this segment can significantly improve the company’s profit indicators. Margins improved by about 10% thanks to the purchase of Xilinx, resulting in adjusted earnings per share increasing at a high double-digit rate (+67% in the second quarter of 2022). AMD is successfully growing its market share in server processors due to a reduction in the percentage of Intel. The last report reported a 16% decrease in sales in the segment of data center solutions.