AMD Stock Surges on Earnings Beat Driven by AI Chip Sales

For the quarter, AMD reported adjusted earnings per share (EPS) of $0.69 and revenue of $5.8 billion. Wall Street was anticipating adjusted EPS of $0.68 on revenue of $5.7 billion, according to consensus estimates by Bloomberg.

AMD's Data Center revenue, which includes sales of AMD's GPUs and CPUs, topped out at $2.8 billion, beating expectations of $2.75 billion. That's a 115% jump versus the same quarter last year, when AMD reported Data Center revenue of $1.3 billion.

AMD CEO Lisa Su said on a call with analysts that the company saw “higher than expected” sales of its AI chips, and that revenue from its MI300 chips exceeded $1 billion during the quarter.

“As a result, we now expect data center GPU revenue to exceed $4.5 billion in 2024, up from the $4 billion we guided in April,” Su said.

"Our AI business continued accelerating and we are well positioned to deliver strong revenue growth in the second half of the year led by demand for Instinct, EPYC and Ryzen processors," she added.

The company also revealed that its next-generation MI325X will be available beginning in Q4, while the MI350X will hit the market in 2025. AMD said it will roll out the MI400 in 2026.

It's not just AI that matters for AMD, though. Its Client segment, which includes sales of chips for PCs, is still an important part of its business. For the quarter, the company reported revenue of $1.5 billion beating expectations of $1.45 billion, and up from $998 million in the same period last year. That growth suggests that the PC market is recovering from a few years of post-pandemic slump.

Besides, AMD also makes chips for gaming consoles and GPUs for 3D graphics. It reported $648 million revenue in the gaming category, down 59% year over year.

The company’s embedded segment, which is made up of products acquired through the Xilinx acquisition in 2022 for industrial customers, reported $861 million in sales, dropping 41% year over year, hurt by weak demand from customers who have built up stockpiles of parts.

Source: CNBC, Yahoo Finance, Bloomberg