AMD revenues fall 18% to $5.36B as PC market recovers and AI rises

Superior Micro Gadgets reported that income in its second quarter was $5.36 billion, down 18% from a 12 months earlier because the shopper PC market continues to climb again through the financial downturn.

However traders took the report as excellent news, as AI-related shares resembling AMD, which makes the processors and graphics processing items (GPUs) utilized in AI machines, are using on excessive demand for AI. In after-hours buying and selling, AMD’s inventory rose 5% to $123.5 a share. PC market situations additionally improved from the earlier quarter. Because of this, AMD beat expectations for each revenues and web revenue.

Analysts anticipated Q2 earnings per share to return in at 57 cents on income of $5.31 billion. GAAP web revenue for Q2 got here in at $27 million, or 2 cents a share, down 93% from a 12 months in the past. On a non-GAAP foundation, web revenue for Q2 was $948 million, or 58 cents a share, down 45% from a 12 months in the past. So, AMD beat the numbers on each web revenue and revenues.

“We delivered robust ends in the second quarter as 4th Gen Epyc and Ryzen 7000 processors ramped considerably,” stated AMD CEO Lisa Su, in an announcement. “Our AI engagements elevated by greater than seven occasions within the quarter as a number of clients initiated or expanded packages supporting future deployments of Intuition accelerators at scale. We made robust progress assembly key {hardware} and software program milestones to deal with the rising buyer pull for our knowledge middle AI options.”

She stated the corporate is on observe to launch and ramp manufacturing of MI300 accelerators within the fourth quarter.

“We’re happy with our second quarter execution,” stated AMD CFO Jean Hu, in an announcement. “Trying to the third quarter, we anticipate our knowledge middle and shopper section revenues to every develop by a double-digit proportion sequentially pushed by rising demand for our Epyc and Ryzen processors, partially offset by gaming and embedded section declines.”

AMD additionally stated it expects about $5.7 billion in gross sales within the present third second quarter, plus or minus $300 million. It expects non-GAAP gross revenue margins of 51%.

Amongst AMD’s divisions, AMD’s shopper group, which incorporates PC processor gross sales, noticed a large decline from a 12 months in the past. AMD reported $998 million in gross sales for the shopper group, down 54% from a 12 months in the past. Income was up 35% sequentially as AMD Ryzen 7000 Sequence CPUs ramped considerably and PC market situations improved. Greater than 100 AMD-powered business PC platforms are set to launch this 12 months.

For the info middle, AMD gross sales fell 11% to $1.3 billion in comparison with final 12 months. That was as a result of decrease third-generation Epyc processor gross sales as enterprise demand was smooth and cloud stock ranges have been elevated at some clients. AMD stated there are greater than 670 AMD-powered cloud cases publicly out there. And AMD Intuition MI300A and MI300X GPUs are sampling to high-performance computing, cloud and AI clients. Sequentially, income was up 2% as 4th Gen AMD Epyc CPU revenues doubled and Epyc CPU enterprise gross sales elevated, offset by a decline in adaptive system-on-chip knowledge middle merchandise.

The embedded section, which incorporates networking chips, grew 16% to $1.5 billion in comparison with a 12 months in the past because of power within the Industrial, Imaginative and prescient and Healthcare, Automotive and Take a look at and Emulation markets. Income was down 7% from the earlier quarter primarily based on softness within the communications market.

AMD’s gaming section, which incorporates graphics processors for PCs in addition to chips for consoles just like the Ps 5 and Xbox Sequence X/S, reported $1.6 billion in gross sales, up 16% from a 12 months in the past. That was pushed by progress in semi-custom chips, offset by decrease gaming graphics gross sales. Income declined 10% sequentially primarily as a result of decrease gaming graphics gross sales.

Final week, AMD’s rival Intel reported Intel reported web revenue of $500 million, or 13 cents a share, in contrast with a revenue of $1.1 billion, or 28 cents a share, a 12 months earlier, on revenues of $12.9 billion, down 15% from a 12 months in the past for the second quarter ended July 1.

Throughout the quarter, AMD confirmed off its code-named Bergamo and Genoa-X Epyc CPUs. And its fourth-generation Epyc chips have been picked up by clients resembling AWS, Alibaba, Microsoft Azure and OCI. Cerebras unveiled its Condor Galaxy 1 cloud-based AI supercomputer with greater than 70,000 AMD Epyc CPU cores.