To The Moon

Advanced Micro Devices Inc. shares rose 2% before the bell after the chip maker's data-center sales gained and executives forecast sales of more than $5 billion to start 2023.

AMD forecast revenue of $5 billion to $5.6 billion for the first quarter, with declines in client and gaming offset by gains in data-center and embedded sales, and a gross margin of 50%. While that did not blow away Wall Street's expectations -- analysts had estimated earnings of 68 cents a share on revenue of $5.5 billion for the first quarter, according to FactSet -- it did quell some fears that cropped up after disappointing Intel Corp. $(INTC)$ results and forecast last week.

On the call with analysts, AMD Chief Executive Lisa Su called 2022 a "strong" year for the company, a stark contrast to the worst year for Intel since the dot-com bust.

"Although the demand environment is mixed, we are confident in our ability to gain market share in 2023 and deliver long-term growth based on our differentiated product portfolio," Su said in a statement.

Su said three months ago that AMD would "certainly exit the year in a better place," after the company's outlook, which had been below Wall Street estimates at the time, included the cost of clearing out inventory. There were doubts AMD would live up to her words following Intel's dreary report.

Intel's worse-than-feared quarterly report arrived as the PC industry deals with the worst shipment declines in recorded history. AMD, Intel and Nvidia Corp. $(NVDA)$ had all poured new models of gaming cards into the holiday channel at a time when PC shipments were dropping at their steepest recorded rates and a wave of secondhand graphics-processing units, or GPUs, hit the market as unprofitable cryptocurrency-mining operations folded

AMD reported fourth-quarter net income of $21 million, or a penny a share, compared with $972 million, or 80 cents a share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation expenses and other items, were 69 cents a share, compared with 92 cents a share in the year-ago period.

Revenue rose to $5.6 billion from $4.83 billion in the year-ago quarter, with more than half of that coming from data-center and embedded sales. For the fourth quarter, AMD had forecast revenue of $5.2 billion to $5.8 billion, with its embedded and data-center segments "expected to grow," with revenue of $23.2 billion to $23.8 billion for the year and gross margins of about 51%.

Analysts surveyed by FactSet had forecast 67 cents a share on revenue of $5.52 billion, with expected 2022 revenue of $23.52 billion.

Data-center sales rose 42% to $1.7 billion, while analysts expected $1.71 billion, the company reported, using its reclassified product groups.

Client -- that is, PC -- sales fell 51% to $903 million from a year ago, while the Street had estimated $965.8 million. Gaming sales fell 7% to $1.6 billion, while analysts were expecting $1.49 billion.