Chip giant AMD (AMD) reported its second-quarter earnings after the stock market closed on Tuesday. The earnings and results beat analysts’ expectations, and the third-quarter forecast was better than expected.
AMD, like rival Nvidia, is riding the AI hype train, which is boosting sales of its graphics processing units (GPUs) and central processing units (CPUs) for data centers. For the quarter, AMD reported adjusted earnings per share (EPS) of $0.69 on revenue of $5.8 billion. Wall Street had expected adjusted EPS of $0.68 on revenue of $5.7 billion, according to Bloomberg’s consensus estimates. AMD reported adjusted EPS of $0.58 on revenue of $5.4 billion through 2023.
“Our AI business continues to grow and we are well positioned to deliver strong revenue growth in the second half of the year, driven by demand for Instinct, EPYC and Ryzen processors,” AMD CEO Lisa Su said in a statement.
“The rapid advances in generative AI are driving demand for more computing power in every market, creating significant growth opportunities as we deliver leading AI solutions across our business.”
AMD’s Data Center revenue, which includes sales of AMD’s GPUs and CPUs, peaked at $2.8 billion, beating expectations of $2.75 billion. That’s a 115% jump from the same quarter last year, when AMD reported Data Center revenue of $1.3 billion.
Shares of AMD rose as much as 5% after the report, while shares of rival Nvidia (NVDA) rose 3%. Shares of Intel (INTC) were flat.
AMD’s current top-of-the-line GPU is the MI300X. During a press conference at its Computex event in Taiwan in June, AMD said that partners and customers including Microsoft, Meta, Dell, HPE and Lenovo have already adopted the chip. The company also revealed that the next-generation MI325X will be available from Q4, while the MI350X will hit the market in 2025. AMD said it will roll out the MI400 in 2026.
It’s not just AI that’s important to AMD, though. The Client segment, which includes sales of chips for PCs, is still a major part of the business. For the quarter, the company reported revenue of $1.5 billion, beating expectations of $1.45 billion and up from $998 million in the year-ago period.
The increase in the Client segment comes as the PC industry continues to recover after a significant slowdown following the explosive growth seen at the start of the pandemic.
But that was four years ago, and consumers are now shopping for replacements for the PCs they bought at the start of the pandemic. That’s resulted in a 3% year-over-year increase in global PC shipments in the second quarter, according to IDC, marking the second quarter of growth after eight straight quarters of declines.
Gaming revenue was $648 billion in the second quarter, down 59% year-over-year, but beat estimates of $646 billion.
Like the PC industry, the gaming industry is also experiencing a slowdown compared to the booming sales days at the start of the pandemic. Still, there is hope for the gaming industry in late 2024 and early 2025, as Nintendo prepares to launch its next console and Take-Two readies its long-awaited “Grand Theft Auto VI” later next year.
AMD is the first of the Big Three chip companies to report earnings this quarter. Intel follows on August 1, while Nvidia reports its earnings on August 28.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.
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