Semiconductor giant AMD (Am) reported second-quarter results after the close of trading on Tuesday, beating analysts’ expectations for sales and profits and also outlining a better-than-expected third-quarter outlook.
Like rival Nvidia, AMD is riding the AI boom that’s driving sales of graphics processing units (GPUs) and central processing units (CPUs) in data centers. AMD reported adjusted earnings per share (EPS) of $0.69 for the quarter on revenue of $5.8 billion. Wall Street had expected adjusted EPS of $0.68 on revenue of $5.7 billion, according to Bloomberg consensus estimates. For the same period in 2023, AMD reported adjusted EPS of $0.58 on revenue of $5.4 billion.
“Our AI business continues to accelerate and is poised to achieve significant revenue growth in the second half of the year, driven by demand for our Instinct, EPYC and Ryzen processors,” AMD CEO Lisa Su said in a statement.
“Rapid advances in generative AI are driving computing demand across all markets, creating significant growth opportunities for us as we deliver leadership AI solutions across the business.”
AMD’s data center revenue, which includes sales of AMD’s GPUs and CPUs, reached $2.8 billion, beating expectations of $2.75 billion. This is an increase of 115% compared to the same quarter last year, when AMD reported data center revenue of $1.3 billion.
AMD’s shares rose 5% on the news, while rival Nvidia’sNVDA) rose 3%. Intel (International Trade Commission) remained flat.
AMD’s current top GPU is the MI300X. During a press conference at its Computex event in Taiwan in June, AMD said that partners and customers such as Microsoft, Meta, Dell, HPE and Lenovo have already adopted the chip. The company also revealed that the next-generation MI325X will be available from the fourth quarter, with the MI350X launching in 2025. AMD said the MI400 will be released in 2026.
But AI isn’t the only thing that matters to AMD. Its client division, which includes selling chips for PCs, remains a key part of the company’s business. The company reported quarterly revenue of $1.5 billion, beating expectations of $1.45 billion and up from $998 million in the same period last year.
The client segment Beats PC Industry Continues to Recover The explosive growth seen at the start of the pandemic has been followed by a significant slowdown.
But that was four years ago, and consumers are starting to replace PCs they bought when the pandemic began. As a result, worldwide PC shipments rose 3% year over year in the second quarter, marking the second consecutive quarter of growth after eight consecutive quarters of declines, according to IDC.
Gaming revenue hit a record high of $648 billion in the second quarter, down 59% from the same period last year but beating expectations of $646 billion.
Like the PC industry, the video game industry is suffering a slowdown compared to the robust sales it saw at the start of the pandemic. Hopes for the gaming industry That’s expected to be released in late 2024 or early 2025, as Nintendo gears up for the launch of its next-generation console and Take-Two prepares the highly-anticipated Grand Theft Auto VI for late next year.
AMD is the first of the big three chipmakers to report this quarter’s results, with Intel due to report on Aug. 1 and Nvidia due to report on Aug. 28.
Contact Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter. Daniel Howley.
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