Advanced Micro Devices, Inc.
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Advanced Micro Devices, Inc. is a global semiconductor company. The Company operates through four segments: Data Center, Client, Gaming, and Embedded. The Data Center segment includes server central processing units (CPUs) and graphics processing units (GPUs), data processing units (DPUs), field programmable gate arrays (FPGAs) and adaptive system-on-a-chip (SoC) products for data centers. The Client segment includes CPUs, accelerated processing units (APUs) that integrate microprocessors and GPUs (APUs), and chipsets for desktop and notebook personal computers. The Gaming segment includes discrete GPUs, semi-custom SoC products and development services. The Embedded segment, which primarily includes embedded CPUs and GPUs, FPGAs, and adaptive SoC products. The Company’s CPUs for desktop platforms include the AMD Ryzen and AMD Athlon series processors. Its mobile APUs include AMD Ryzen and AMD Athlon mobile processors for the commercial and consumer markets.
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What is AMD and what does it do?
It's what it says on the tin. AMD stands for Advanced Micro Devices. They're global leaders in the development of semiconductors used for computer processing. As in microchips.
The company’s aim is “to create and deliver the world’s leading high performance CPUs and GPUs, and to integrate these CPUs and GPUs with hardware and software to build differentiated solutions.”
In case you don’t know, a CPU (Core Processing Unit) is key to running programs and processing actions or calculations. A GPU (Graphics Processing Unit) renders what you see on screen.
On top of CPUs and GPUs, AMD also creates APUs (a combination of CPUS and GPUs), motherboard chip sets, flash memories and a wide variety of components used in consumer electronic goods.
AMD’s strategic focus lays firmly on the gaming, cloud gaming, computing, artificial intelligence and virtual and augmented reality markets.
How does Advanced Micro Devices make money?
AMD earns and reports revenue via two segments, Computing & Graphics and Enterprise, Embedded & Semi-Custom.
The Computing & Graphics segment sees revenue from the sale of desktop, notebook and commercial microprocessors and chipsets on the computing side. On the graphics side, revenue comes from the sale of graphics processors for desktops and notebooks, professional graphics cards for workstations, data centre graphics accelerators and visual cloud data centre GPUs.
AMD’s Enterprise, Embedded & Semi-Custom segment sees revenue from the sale of server processors and embedded processors. AMD also designs tailored semi-custom solutions for customers such as Nintendo, Microsoft (MSFT) and Sony.
Is Advanced Micro Devices profitable?
AMD’s operating income rose from negative US$497m to US$43m between FY2016 and FY2017. The company has been profitable since.
Over the past 3 years, AMD’s operating income has seen an impressive compound annual growth rate (CAGR) of 140% growing from US$631b in FY2019 to US$1.3b in FY2020 to US$3.6b in FY2021.
AMD holds more than US$3.2b of cash.
How is AMD different from Intel (INTC) and Nvidia (NVDA)?
Of the three, Nvidia is the odd one out as it only designs GPUs at this time. AMD and Intel share more in common as they design both CPUs and GPUs.
However, Intel is the only one that handles both the design and manufacturing of their products, while AMD and Nvidia are fabless.
Does AMD pay dividends?
No, AMD does not pay dividends at this time. They have not announced any plans to pay them in the foreseeable future.
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This does not constitute financial advice. You should do your own research before making an investment decision. Past performance is not a reliable indication of future performance. No representation is made as to the timeliness, reliability, accuracy or completeness of the market data provided.
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