Science & Technology

AMD’s Profit Exceeds Analyst Expectations

Advanced Micro Devices (AMD) has published its financial results for the third quarter of this year, which were higher than analysts’ initial expectations regarding the company’s earnings prospects in the period from July to September.

AMD's Profit Exceeds Analyst Expectations

Earnings per share amounted to 70 cents at the end of the last quarter. At the same time, analysts predicted this figure at around 68 cents.

The revenue of one of the main players in the American technology sector for the third quarter amounted to $5.8 billion, which is 4% higher than the result of a year ago. This indicator exceeded analysts’ expectations. Experts predicted the company’s revenue at $5.7 billion.

AMD expects that by the end of the fourth quarter, sales in financial terms will amount to about $6.1 billion. This vision of future indicators turned out to be worse than the forecasts of analysts, who stated the likely revenue for the mentioned period in the amount of $6.37 billion.

AMD is one of the few chip manufacturers that can produce high-end graphics processor units (GPUs) that are used to train and deploy generative artificial intelligence models. Currently, Nvidia dominates the GPU market.

AMD intends to strengthen its position in sphere-advanced microcircuits. The company said it plans to launch mass production of its new MI300A and MI300X machine intelligence chips in the fourth quarter.

The MI300 processor will compete with Nvidia’s developments in the market of artificial intelligence accelerators. The company said that its new microcircuit has already received many early orders, including from large firms specializing in cloud computing. AMD expects that in the fourth quarter, new developments will generate a profit of $400 million. The company also predicts that microcircuits will help earn $2 billion in the next year.

AMD CEO Lisa Su stated that the MI300 is a great product, separately noting her enthusiasm for the progress the company is making in the sphere of hardware and software.

Against the background of the forecasts of this player in the technology sector on earnings for the fourth quarter, the value of its shares decreased by about 4%, but this indicator recovered after it became known about optimistic expectations regarding the production of artificial intelligence chips.

The data center, which includes AMD server processors and AI chips, reported sales of $1.6 billion in the third quarter, which indicates no changes compared to the result of a year ago.

Lisa Su stated that there is currently a trend of increasing workloads on generative artificial intelligence. Also, according to her, the process of introducing machine intelligence into corporate apps to increase the level of business productivity is at an early stage of implementation.

The revenue of the company’s client group, which includes sales of processors for personal computers, amounted to $1.5 billion in the third quarter. This figure is 42% higher than the result recorded for the same period last year.

AMD’s revenue in the embedded systems segment showed a negative dynamic. This indicator decreased by 5% year-on-year. This line of activity brought the company revenue, which amounted to $1.2 billion. The company stated that this result was due to weak demand in the communications market. In this case, it implies the sale of components for creating networks and a field-programmable gate matrix.

According to the results of the last quarter, the gaming segment also became a business area for AMD, where a positive dynamic was not recorded. In this case, sales decreased by 8% compared to the result of a year ago, amounting to $1.5 billion. This negative trend is due to the weakening of demand for so-called semi-custom chips. This is how the company calls its business for the production of processors for consoles.

Experts note that AMD, Nvidia, and Intel, which are in a state of competition concerning each other, are united by their desire to make their technologies indispensable in data centers. These efforts are actually part of the so-called race for artificial intelligence, which already has a global scale. Currently, Nvidia is the leader, as evidenced by the fact that its market valuation exceeds $1 trillion. But the peculiarity of any race is that the leader’s position is not eternal.

As we have reported earlier, NVIDIA Introduces Superchip to Boost AI Capacity.

Serhii Mikhailov

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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.