AMD earnings report Q2 2024

Advanced Micro Devices reported second-quarter earnings on Tuesday that beat Wall Street expectations for revenue and showed continued growth in sales of the company’s AI chips.

AMD shares rose 3% in extended trading.

Here’s how AMD did versus LSEG consensus expectations for the quarter ended in June:

• Earnings per share: 69 cents adjusted versus 68 cents
• Revenue: $5.83 billion versus $5.72 billion expected

AMD said it expects about $6.7 billion in sales in the current quarter, versus Wall Street expectations of $0.93 in earnings per share on $6.61 billion of sales.

The chipmaker reported net income of $265 million, or 16 cents per share, versus net income of $27 million, or $0.02 per share in the year-ago period.

AMD shares are down about 6% in 2024, even though the company is the second-largest vendor of data center GPUs after Nvidia. Nvidia’s stock has more than doubled this year as AI GPUs are required for training and deploying advanced AI like ChatGPT and Nvidia has become the chip of choice.

Investors want to see AMD take market share away from its longtime rival Nvidia with its MI300X AI chip and signal growth in its data center AI business. Earlier this year, AMD said it expected $4 billion in AI chips sales this year, or about 15% of the company’s expected sales.

AMD AI chip sales are reported in the company’s Data Center segment, which grew 115% year-over-year to $2.8 billion. Analysts polled by Street Account were expecting $2.75 billion in Data Center revenue. AMD said the growth was because of the strong increase in shipments of the company’s AI chips, which it calls Instinct GPUs.

AMD’s core business is making central processors (CPUs) for laptops and servers. Sales for PCs are reported in the company’s Client segment, which rose 49% year-over-year to $1.5 billion, versus expectations of $1.43 billion from Street Account. That growth suggests that the PC market is recovering from a few years of post-pandemic slump.

AMD also makes chips for gaming consoles and GPUs for 3D graphics, which are reported in the company’s gaming category. AMD reported $648 million in gaming revenue, down 59% year-over-year. Analysts were expecting $676 million in sales, per Street Account.

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, and beating Wall Street expectations of $856 million.