Advanced Micro Devices (AMD) reported third-quarter earnings that exceeded expectations, solidifying its position in the highly competitive technology market where it faces stiff competition with Intel. As of the latest data available, AMD’s stock on NASDAQ is trading at $108.07 per share.
Advanced Micro Devices (AMD) reported third-quarter earnings that exceeded expectations. However, the company’s future outlook is less optimistic than what experts had anticipated.
Initially, AMD’s stock experienced a 4% drop in the last 24 hours, but it rebounded after the company provided a bullish forecast for its 2024 prospects in the artificial intelligence chip sector.
AMD’s CEO, Lisa Su, stated, “We anticipate revenues from data center GPUs to reach approximately $400 million in the fourth quarter and exceed $2 billion in 2024 as revenues continue to grow throughout the year.”
In the third quarter of 2023, AMD reported revenues of $5.8 billion, marking a modest 4% growth when compared to the same quarter in 2022. Notably, this revenue increase was not driven by a surge in the server market, as that segment remained relatively unchanged.
The Gains Driven by Ryzen 7000 PC Processors
Lisa Su, AMD’s CEO, stated, “We achieved strong revenue and earnings growth driven by the demand for our Ryzen 7000 processors for PCs and record processor sales for servers.”
She added, “Our data center business is on a significant growth trajectory based on the strength of our EPYC CPU portfolio and the ramp-up of shipments of the Instinct MI300 accelerator to support multiple deployments with hyperscale, enterprise, and AI customers.”
It is worth noting that AMD’s Data Center business, powered by its EPYC CPUs, was a key revenue source. Although overall revenues in this segment remained stable, there was a 21% increase in sales of their 4th Generation EPYC CPUs. However, a decrease in sales of SoCs for data centers balanced these numbers. Additionally, it’s important to mention that the Instinct MI300A and MI300X GPUs are still awaiting mass production, which is expected to commence in the next quarter.
AMD Ryzen 7000 CPUs
In the Client market segment, the numbers are quite promising, with revenues reaching $1.5 billion, representing an impressive 42% increase compared to Q3 2022. This is largely attributed to the sales of AMD Ryzen 7000 CPUs, both for laptops and desktop PCs. In the Gaming sector, revenues also amounted to $1.5 billion, but there is a concern as there is an 8% decline compared to the previous year. While sales of AMD Radeon GPUs saw an increase, there was a reduction in sales of semi-custom SoCs.
Finally, in the embedded and integrated devices segment, revenues declined by 5%, amounting to $1.2 billion. AMD attributed this decline to inventory corrections among its customers.