Chip giant AMD reported second-quarter earnings after the bell on Tuesday, surpassing Wall Street expectations on both top and bottom lines and providing better-than-expected guidance for the third quarter.
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| AMD CEO Lisa Su makes the opening speech at COMPUTEX forum in Taipei, Taiwan June 3, 2024. (REUTERS/Ann Wang) (REUTERS / Reuters) |
AMD, like its competitor Nvidia, is capitalizing on the AI boom, driving sales of its data center graphics processing units (GPUs) and central processing units (CPUs). The company posted adjusted earnings per share (EPS) of $0.69 with revenue of $5.8 billion for the quarter. Analysts had anticipated an adjusted EPS of $0.68 on revenue of $5.7 billion, according to Bloomberg consensus estimates. For the same period in 2023, AMD reported an adjusted EPS of $0.58 on revenue of $5.4 billion.
"Our AI business continued accelerating and we are well positioned to deliver strong revenue growth in the second half of the year led by demand for Instinct, EPYC, and Ryzen processors," AMD CEO Lisa Su stated. "The rapid advances in generative AI are driving demand for more compute in every market, creating significant growth opportunities as we deliver leadership AI solutions across our business."
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| AMD Stock Surges Following Earnings Beat Fueled by AI Chip Sales |
Shares of AMD rose more than 9% in pre-market trading on Wednesday, while Nvidia's shares increased by about 5%. Intel's shares were up 2%.
AMD's Data Center revenue, which includes sales of GPUs and CPUs, reached $2.8 billion, exceeding expectations of $2.75 billion. This marks a 115% increase compared to the same quarter last year when AMD reported Data Center revenue of $1.3 billion.
Currently, AMD's top GPU is the MI300X. In June, during the Computex trade show in Taiwan, AMD announced that partners and customers such as Microsoft, Meta, Dell, HPE, and Lenovo are already adopting the chip. The company also revealed that its next-generation MI325X will be available from Q4, with the MI350X set for 2025. The MI400 is planned for release in 2026.
Beyond AI, AMD's Client segment, which includes PC chip sales, remains a vital part of its business. The company reported $1.5 billion in revenue for the quarter, beating expectations of $1.45 billion and up from $998 million in the same period last year. The Client segment's success comes as the PC industry continues to recover from a significant slowdown following the pandemic's initial surge.
Consumers are now seeking replacements for the PCs they bought at the pandemic's onset. According to IDC, this shift resulted in a 3% year-over-year increase in global PC shipments in the second quarter, marking the second consecutive quarter of growth after eight quarters of declines.