(Bloomberg) -- Advanced Micro Devices Inc. gave a bullish third-quarter earnings forecast, indicating it’s gaining market share from Intel Corp. in the lucrative market for server chips.
AMD, the second-largest maker of computer processors behind Intel, predicted third-quarter revenue will be about $4.1 billion, plus or minus $100 million. On average, analysts had projected revenue of $3.8 billion. The company also raised its annual outlook and now expects revenue to increase by 60% up from a previous forecast for 50%.
Chief Executive Officer Lisa Su has brought the company back from the brink of irrelevance with a raft of new products that customers see as competitive with Intel’s offerings for the first time in years. Investors have poured money into AMD’s stock over the last five years, expecting Su’s changes to result in higher market share and earnings. So far this year, however, the stock has slid about 2%, compared with the Philadelphia Stock Exchange Semiconductor Index’s 13% gain, as the market looks for evidence of sustained progress.
“We are growing significantly faster than the market with strong demand across all of our businesses,” Su said in a statement.
AMD’s earnings report Tuesday indicates the company is taking market share at Intel’s expense. Intel, the world’s largest superconductor manufacturer, reported a 6% decline in second quarter revenue. AMD also competes with Nvidia Corp. in the market for graphics processors used in cards for gaming PCs.
Santa Clara, California-based AMD reported second-quarter profit that more than tripled to $710 million, or 58 cents a share, beating analysts’ estimates. Revenue rose 99% to $3.8 billion.
AMD shares rose 2.2% in extended trading following the announcement after closing at $91.03 in New York.
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