Advanced Micro Devices (AMD) has released information on its financial results for the second quarter of the current year.
During extended trading, shares of the mentioned company rose by 8%. The financial results of the firm’s activities for the last quarter exceeded preliminary expectations.
AMD, based in Santa Clara, California, recorded revenue of $5.84 billion in April-June of the current year. The LSEG consensus forecast provided that this figure would amount to $5.72 billion. The company’s revenue grew by 9% year-on-year.
Adjusted earnings per share was fixed at 69 cents. The LSEG consensus forecast called for this figure to be 68 cents.
AMD expects its revenue to reach approximately $6.7 billion in the current quarter. At the same time, expectations were widespread on Wall Street, according to which the mentioned figure would amount to $6.61 billion.
Since the beginning of the current year, AMD shares have fallen by about 6%. It is worth noting that this is an unexpected result against the background of the fact that the company is the world’s second-largest provider of graphics processing units for data centers. Currently, the tendency of scaling artificial intelligence is observed at the global level. Against this background, the demand for data centers and, accordingly, graphics processing units is growing. The main supplier of the mentioned products in the world is currently Nvidia, whose market value exceeded the historical $3 trillion mark in the summer. In the current year, the specified company’s stock has more than doubled. Nvidia products are essential for the training and deployment of advanced artificial intelligence systems such as ChatGPT.
Investors expect that AMD’s MI300X chip will allow the company to increase its market share in microcircuits designed for use in the area of machine intelligence. They also hope that in the foreseeable future, the firm will be able to achieve the growth of its business in the sphere of data centers. Moreover, it would be very good news for investors that AMD was able to weaken the market position of its main competitor, which is Nvidia. So far, this vision of potential probabilities does not agree well with the real state of affairs.
AMD in April expected its sales of artificial intelligence chips to reach $4 billion in the current year. Lisa Su, the company’s chief executive officer, said during a conversation with analysts that sales of AI chips exceeded expectations, separately noting that the MI300 microcircuits generated revenue of more than $1 billion for the second quarter of the current year. She also expects that sales of graphics processing units for data centers in 2024 in monetary terms will amount to more than $4.5 billion.
In the second quarter of the current year, AMD AI chips in the data center segment generated revenue of about $2.8 billion. This indicator increased by 115% compared to the result for the same period in 2023. Analysts surveyed by StreetAccount expected the revenue of the company’s mentioned business for the second quarter of 2024 to be $2.75 billion.
AMD’s main activity is the production of central processors for laptops and servers. The revenue of the mentioned business of the company for the second quarter of 2024 was fixed at $1.5 billion. This indicator increased by 49% year-on-year. Analysts surveyed by StreetAccount predicted that the revenue of the company’s mentioned business for the second quarter of 2024 would be $1.43 billion. The growth of this indicator suggests the recovery of the personal computer market after the downturn, which has been observed since about 2022.
Another area of AMD’s business is the production of chips for game consoles and graphics processor units for 3D graphics. The revenue of this business of the company for the second quarter of 2024 amounted to $648 million. The mentioned indicator fell by 59% compared to the result for the same period in 2023. Analysts surveyed by StreetAccount predicted that the revenue of the company’s specified business line for the second quarter of 2024 would be $676 million.
The company’s embedded segment, which is made up of products acquired through the Xilinx acquisition in 2022 for industrial customers, sold $861 million worth of products in April-June of the current year. This indicator fell by 41% year-on-year. Wall Street’s expectations stipulated that the volume of the mentioned sales would amount to $856 million.
As we have reported earlier, Qualcomm Revenue Beats Estimates.
