AMD earnings report Q3 2024

Advanced micro-devices reported third-quarter results Tuesday, with earnings in line with forecasts and revenue that slightly beat expectations.

Here’s how the company fared compared to LSEG estimates for the quarter ended Sept. 28:

• Earnings per stock: 92 cents adjusted vs. 92 cents expected
• Revenues: $6.82 billion vs. $6.71 billion expected

AMD said its key data center business doubled sales for the second straight quarter, but overall revenue expectations for the fourth quarter were in line with consensus expectations.

AMD stock fell 6% in extended trading on Tuesday.

AMD said it expected about $7.5 billion in sales in the current quarter, in line with consensus expectations of $1.16 in adjusted earnings per share on $7.54 billion in revenue. That would be a 22% year-over-year decline for the December quarter.

The chipmaker reported net income of $771 million, or 47 cents per share, compared with $299 million, or 18 cents per share, a year ago. Total Average Absolute Deviation, or MAD, revenue increased 18% year over year.

AMD shares are up about 20% so far in 2024, although rivals such as Nvidia and Broadcom have enjoyed much bigger gains over the same period, driven by rising demand for AI chips. AMD is the second largest supplier of data center graphics processing units, or GPUs, which are used to train and deploy large generative AI models.

In October, AMD announced a new artificial intelligence chip called the MI235X and said it expected the AI ​​GPU market to be worth $500 billion by 2028. The company also said earlier this year that it expected about $4 billion in sales in year in total AI chips, or about 15% of the company’s total revenue.

AMD’s AI chips are reported in its data center segment, which more than doubled year over year to $3.5 billion in total sales. AMD said it was primarily driven by strong sales of its Instinct-branded GPUs for AI. Total data center revenue increased 122% year over year.

AMD’s gross margin grew to 54%, which the company said was due to higher data center revenue.

AMD also makes central processor chips for laptops and servers. PC sales are reported in AMD’s consumer segment, which grew 23% during the quarter to $1.9 billion. During the quarter, AMD’s chips were included in high-end laptops marketed by Microsoft as “Copilot+” machines that can run advanced AI included with Windows.

AMD also makes chips for gaming consoles and PCs. Its gaming category slumped, with sales down 68% year-over-year, which the company blamed on a decline in “semi-custom revenue,” which includes custom chips for game consoles such as the Sony PlayStation 5.

The company’s embedded business, which includes lower-cost chips for industrial and other applications, fell 25% annually to $927 million in sales.