Science & Technology

AMD Reports First-Quarter Earnings

Advanced Micro Devices (AMD) on Tuesday, April 30, released information about the financial results of its operations in the first quarter of the current year.

AMD Reports First-Quarter Earnings

The revenue of the mentioned company for January- March 2024 amounted to $5.47 billion. This indicator increased by about 2% compared to the result for the same period last year. At the same time, the LSEG consensus forecast provided that the company’s revenue for the first quarter of 2024 would be fixed at $5.46 billion. The final result turned out to be better than the preliminary expectations.

Adjusted earnings per share of the company is 62 cents. The LSEG consensus forecast provided the expectation that the corresponding indicator would be fixed at 61 cents.

The company’s net income for the three-month period ended March 31 was $123 million. It is worth noting that for the same period in 2023, AMD faced a net loss of $139 million.

The company’s share price showed a decrease of 7% during extended trading on Tuesday. At the same time, AMD’s securities have grown significantly since the beginning of the current year. Since January 1, the corresponding indicator has increased by 14%. At the same time, there was a drop in stock on Tuesday, and regarding this dynamic such factors as the company’s financial performance, which exceeded preliminary expectations, and sales growth of artificial intelligence chips did not become barriers.

AMD reported that its Data Center segment, which is a kind of subject of close surveillance, reached the $2.3 billion mark in the first quarter of 2024. This indicator increased by 80% year-on-year. The corresponding result is due to sales of artificial intelligence chips of the MI300 series, which compete with Nvidia GPUs.

Lisa Su, CEO of the company, said that Microsoft, Meta, and Oracle use AMD MI300X microcircuits. These chips launched on the market in the fourth quarter of last year. The total value of the respective microcircuits sold since the mentioned moment has exceeded the $1 billion mark.

AMD predicts that sales of artificial intelligence chips will bring it a profit of $4 billion this year. It is worth noting that in January, the company expected that the corresponding figure in 2024 would be fixed at $3.5 billion. At the same time, Nvidia, which currently has the status of the world’s main manufacturer of server chips with artificial intelligence confirmed by material results, sold products worth $18.4 billion in the January quarter. It is worth noting that this indicator applies only to the data center segment.

Lisa Su told investors on Tuesday that the company is currently working on new artificial intelligence chips and microcircuits, which will be a kind of continuation of the firm’s existing products of the corresponding category. According to her, AMD is getting closer to its main customers in the machine intelligence industry. She also stated that clients provide important feedback about the company’s roadmap.

Also, one of AMD’s activities is the production of central processor units. The corresponding products are often paired with advanced artificial intelligence chips in servers. Lisa Su, during a telephone conversation with analysts, said that AMD believed it had taken market share in the server CPU segment. Also, according to her, there are currently signs of an improvement in demand for the mentioned products of the company. Lisa Su noted that this tendency is associated with a significant increase in consumer interest in artificial intelligence servers.

The worst result for the first quarter of 2024 was demonstrated by AMD’s business in the gaming area. In this case, the financial performance indicator was fixed at $922 million, which is 48% lower than the figure for the same period last year. The company attributes this result to a drop in sales of chips for game consoles and personal computers. For example, AMD manufactures microcircuits for Sony’s PlayStation 5.

AMD’s original business related to making processors for chips and personal computers is presented in the company’s financial results report for the first quarter of 2024 as revenue from the client segment.

The firm’s sales for January-March of the current year amounted to $1.4 billion. This figure is 85% higher than the result for the same period last year. Also, the mentioned result is evidence that the downturn in the personal computer manufacturing sector, which was observed last year, has ended.

AMD processors designed for PC use can run artificial intelligence programs locally. These products are necessary for so-called personal computers with AI. It is worth noting that currently, many players in the laptop and PC manufacturing sector are betting on artificial intelligence as the main driver of sales growth.

AMD’s embedded device segment made up of products purchased as part of the Xilinx acquisition in 2022, recorded a 46% year-on-year drop in sales in the first quarter of 2024. In monetary terms, the corresponding figure was $846 million. At the same time, Wall Street analysts expected this figure to be fixed at $942 million.

As we have reported earlier, AMD’s Market Value Tops $300 Billion.

Serhii Mikhailov

2265 Posts 0 Comments

Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.