Mystery cloud added 10,000 new AMD Epyc servers in under ten days to handle demand for you know what

Chip challenger announces 40 percent Q1 growth, lowers guidance

Chip challenger AMD has posted a strong set of Q1 results, and made the now-rare decision to provide guidance for the remainder of the year – though also lowered that guidance for the period.

That reduced confidence was, of course, attributed to the COVID-19 coronavirus pandemic you may have heard about lately.

But the plague also helped AMD a little: on an earnings conference call, CEO Lisa Su told investors: “One of our large cloud customers was able to deploy 10,000 2nd Gen Epyc servers in less than 10 days to support the surge in demand for their collaboration services.”

AMD didn’t say who got epic with Epyc, but The Register thinks there are two obvious candidates for that splurge: Oracle, which today announced it’s working with Zoom; and Microsoft which has ramped Teams mightily and last week revealed it has warehoused servers ready to add to Azure.

But we digress.

AMD’s headline number for Q1 2020, ended Match 28, was its $1.79bn of revenues, up 40 percent compared to the same quarter in 2019. Operating income hit $177m, up $139m from last year's $38m, and net profit reached $162m, well up from last year's $16m. Those numbers were down on Q4 2019, but the end of the calendar year is AMD’s selling season so nobody is too worried.

AMD certainly wasn’t because it has two big buyers – Sony and Microsoft – poised to spend big as they get their new consoles ready for Christmas 2020. But the microprocessor designer did change its guidance. Its end-of-FY-19 prediction was for 28 to 30 percent growth in 2020. It now predicts 25 percent growth, plus or minus five percent.

The US corp's sales and $0.14 earnings-per-share were all in line with Wall Street's expectations. Its shares were down three per cent in after-hours trading to $53.80 apiece.

There was also plenty of good news, such as:

  • 135 Ryzen-powered laptops are in the works and hopes are high that will boost AMD’s desktop market share;
  • Server sales grew “by a double-digit percentage sequentially and more than tripled year-over-year”;
  • All of the big clouds added AMD-powered instance types in the quarter, with Microsoft even building one powered by AMD CPUs and GPUs for virtual desktops;
  • Margins are set to grow thanks to increased data centre business and sales to console-makers;
  • High-end Ryzen CPUs have scored around half of desktop sales among customers of major e-tailers;
  • New high-speed CPUs generated promising sales in April’s early weeks.

Su concluded her prepared remarks by saying: “We remain on track to launch our next-generation Zen 3 CPUs and RDNA to GPUs in late 2020 and believe we can deliver another year of strong revenue growth and margin expansion based on the strength of our product portfolio and the diversity of markets we serve.”

Whether those markets still feel like spending is another matter. ®

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