AMD Anticipates a Boost in Q3 Revenue Despite Analysts’ Predictions”
For the third quarter, AMD is predicting sales to reach $5.7 billion, slightly under the forecasted revenue of $5.81 billion made by market experts. The company anticipates significant growth within its data center and embedded divisions in this fiscal year.
CEO Lisa Su, in a discussion with analysts, expressed optimism about a considerable surge in their Data Center business in the second half of the year, especially leaning toward the fourth quarter.
AMD declared a net income of $27 million, equivalent to 2 cents per share, a decrease from the $447 million or 27 cents per share of the corresponding period last year. The company omits specific investment losses and costs related to acquisitions from its profits.
Recent quarters have seen a slowdown in AMD’s processor operations due to the extensive downturn in the global PC market. The total revenue from AMD fell from $6.55 billion a year ago, indicating two consecutive quarters of reduction.
However, AMD is amongst the handful of companies producing high-grade graphics processing units (GPUs) needed for artificial intelligence. Market observers are keenly following whether AMD’s server chips can secure a more significant market share than their top competitor, Intel.
Intel, last week, revealed unexpected profits and higher than-anticipated sales. Su, in her call, mentioned the company’s plans to ramp up spending on AI-specific research and development and a devised strategy inclusive of AI-specialized chips and software development.
AMD considers AI as a potential growth catalyst, and the company anticipates that AI can stimulate PC chip sales too.
Su further added, “As Microsoft and other software giants integrate generative AI into their products, we foresee AI as a significant demand driver in the PC market going forward.”
AMD’s client group, which comprises sales from PC processors, witnessed a staggering 54% YoY drop to $998 million, attributed to a ‘weaker PC market.’ The company, however, maintains that market conditions are improving and anticipates growth in the client segment in the second half of the year, considering the strength of its product portfolio.
The company’s data center segment experienced an 11% decline to $1.3 billion, attributed to lower server processor sales, as some cloud providers had excess inventory during the quarter.
In the quarter, AMD announced a new chip, the MI300X, intended for building and running AI models crucial for applications like ChatGPT. The chip is currently in the customer sampling stage, with production expected to increase in the fourth quarter.
While AMD’s embedded segment experienced a 16% growth to $1.5 billion, the gaming segment saw a 4% annual drop to $1.6 billion. Despite the decline, the high demand for ‘semi-custom’ chips for game consoles helped mitigate a more significant fall.
