ADVANCED MICRO DEVICES Exceeds Q2 Earnings Expectations, Driven by AI and Data Center Growth.

Q2/24 Results

AMD reported its second-quarter earnings, surpassing analysts' expectations for both revenue and earnings per share (EPS). The company posted adjusted EPS of $0.69 and revenue of $5.8 billion, beating the anticipated $0.68 EPS and $5.7 billion revenue. This growth is fueled by increasing sales in AMD’s data center GPUs and CPUs, driven by the ongoing AI boom.

CEO Lisa Su highlighted the strong performance of AI-related products, with AI contributing significantly to revenue growth. Data Center revenue reached $2.8 billion, a 115% increase year-over-year, exceeding expectations. AMD’s flagship GPU, the MI300X, is gaining traction with major partners like Microsoft and Meta, and future models are expected to continue this momentum.

The Client segment, encompassing PC chip sales, reported $1.5 billion in revenue, up from $998 million the previous year, reflecting a recovering PC market. Gaming revenue, however, declined by 59% to $648 million, but still slightly beat estimates. The embedded segment, including products from the Xilinx acquisition, saw a 41% drop to $861 million but surpassed Wall Street expectations.

AMD expects third-quarter revenue to reach about $6.7 billion, with EPS around $0.93, indicating continued growth in AI and data center segments. The company's shares rose +/- 8% in extended trading following the report, despite being down about 6% year-to-date. Investors remain optimistic about AMD's potential to capture market share from Nvidia with its AI chip offerings.

Key Highlights:

• Adjusted EPS: $0.69 vs. $0.68 expected
• Revenue: $5.8 billion vs. $5.7 billion expected
• Data Center revenue: $2.8 billion, up 115% year-over-year
• Client segment revenue: $1.5 billion, up 49% year-over-year
• Gaming revenue: $648 million, down 59% year-over-year
• Embedded segment revenue: $861 million, down 41% year-over-year

AMD’s strong performance is attributed to the growing demand for AI and data center products, positioning the company for significant future growth.

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