Advanced Micro Devices recently released their second-quarter earnings report, surpassing Wall Street expectations and showcasing impressive growth in sales of the company’s AI chips. The company reported earnings per share of 69 cents, adjusted versus 68 cents, and revenue of $5.83 billion versus $5.72 billion expected. These results led to an 8% rise in AMD shares in extended trading, signaling investor confidence in the company’s performance.
Looking ahead, AMD anticipates approximately $6.7 billion in sales in the current quarter, exceeding Wall Street expectations of 93 cents in earnings per share on $6.61 billion of sales. The chipmaker reported a significant increase in net income, with $265 million, or 16 cents per share, compared to $27 million, or 2 cents per share, in the year-ago period. Despite being down 6% in 2024, AMD remains the second-largest vendor of data center GPUs after Nvidia, a key player in the AI market.
One of the highlights of AMD’s earnings report was the strong performance of its AI chips. Earlier this year, the company projected $4 billion in AI chip sales for 2024, accounting for 15% of its expected sales. CEO Lisa Su announced that revenue from the MI300 chips alone exceeded $1 billion during the quarter, prompting a revision of their data center GPU revenue forecast to over $4.5 billion for the year. This growth was primarily driven by a 115% increase in AI GPU shipments within the Data Center segment.
In addition to AI chips, AMD’s revenue is derived from various segments, including Client, Gaming, and Embedded. The Client segment, which encompasses sales for PCs, saw a 49% increase year-over-year to $1.5 billion, indicating a recovery in the PC market following a post-pandemic slump. The Gaming category, responsible for chips used in gaming consoles and 3D graphics, reported $648 million in revenue, albeit down 59% year-over-year. The Embedded segment, consisting of products acquired through the Xilinx acquisition, generated $861 million in sales, surpassing Wall Street expectations.
Investors are closely monitoring AMD’s progress in taking market share away from Nvidia, particularly with the introduction of the MI300X AI chip. As Nvidia’s stock continues to soar, fueled by the demand for AI GPUs, AMD must demonstrate sustained growth in its data center AI business to remain competitive. The company’s strategic focus on AI chips and data center GPUs underscores its commitment to innovation and market leadership in the semiconductor industry.
AMD’s second-quarter earnings report reflects a positive trajectory for the company, driven by robust sales of AI chips and a recovery in key market segments. As AMD navigates the evolving landscape of AI technology and intensifying competition, its ability to capitalize on emerging trends and meet investor expectations will be critical to sustaining its growth momentum in the future.