Will AMD’s Operating Margin Improve in 2018?

Advanced Micro Devices (AMD) is on track to improve its profit margin by accelerating revenue growth through high-end products and the reduction of expenditure. In the previous article, we saw that the company expects to expand its gross margin to 36%. On the operational front, AMD reduced its non-GAAP (generally accepted accounting principles) operating expenses as a percentage of its revenue from 37% in 1Q17 to 27.8% in 4Q17, bringing it within its long-term target range of 26%–30%. The company expects to maintain its operating expense ratio at 28% in 1Q18 and 2018.