AMD gives soft fourth-quarter guidance, but expects to sell $2 billion of AI chips next year

AMD
reported

third-quarter
earnings
on
Tuesday
that
beat
analyst
expectations,
though
the
chipmaker
issued
a
weaker-than-expected
forecast.

Here’s
how
the
company
did
versus
LSEG
(formerly
Refinitiv)
consensus
estimates
for
the
quarter
ended
in
September:

• 
  EPS:
  70
  cents,
  adjusted,
  versus
  68
  cents
  expected
• 
  Revenue:
  $5.8
  billion,
  versus
  $5.7
  billion
  expected

For
the
fourth
quarter,
AMD
said
it
expects
about
$6.1
billion
in
sales,
while
analysts
were
looking
for
revenue
of
$6.37
billion.

AMD
is
one
of
the
few
chipmakers
capable
of
making
the
kind
of
high-end
graphics
processing
units
(GPUs)
needed
to
train
and
deploy
generative
artificial
intelligence
models.
That
market
is
dominated
by


Nvidia.
AMD
said
its
forthcoming
AI
chips,
the
MI300A
and
MI300X,
are
“on
track”
for
volume
production
in
the
current
quarter.

The
stock
initially
dropped
about
4%
in
extended
trading
but
recovered
after
the
company
gave
a
rosy
2024
forecast
for
its
AI
chip
business.

“We
now
expect
data
center
GPU
revenue
to
be
approximately
$400
million
in
the
fourth
quarter
and
exceed
$2
billion
in
2024
as
revenue
ramps
throughout
the
year,”
AMD
CEO
Lisa
Su
said
on
the
earnings
call.

Net
income
in
the
third
quarter
rose
to
$299
million,
or
18
cents
per
share,
from
$66
million,
or
4
cents
per
share
a
year
ago.
Revenue
increased
4%
from
$5.6
billion
a
year
earlier.

Data
center,
which
includes
AMD’s
server
processors
and
AI
chips
called
GPUs,
reported
$1.6
billion
in
sales,
flat
from
a
year
earlier.
AMD
said
its
sales
of
server
CPUs
grew.
The
chipmaker
added
it
expects
strong
growth
in
its
data
center
business
in
the
fourth
quarter.

“We
would
like
to
be
a
significant
player
in
this
market,”
Su
said.

On
the
call,
Su
also
mentioned

recent
AI
acquisitions
and
improvements
in
the
company’s
AI
software
suite.

“I
think
we
all
see
the
growth
in
generative
AI
workloads
and
the
fact
is
we’re
just
at
the
very
early
innings
of
people
truly
adopting
it
for
enterprise
business
productivity
applications,”
Su
said.

Revenue
in
AMD’s
Client
group,
which
includes
sales
from
PC
processors,
rose
42%
year
over
year
to
$1.5
billion,
driven
by
PC
chips.

Last
week,
chief
rival


Intel

reported
third-quarter
earnings
that
beat
expectations
for
profit
and
sales,
but
still
showed
a
revenue
decline
year
over
year.

AMD’s
embedded
segment
revenue
was
off
5%
to
$1.2
billion,
which
the
company
blamed
on
a
weak
communications
market.
That
includes
parts
for
networking
as
well
as
the
company’s
field
programmable
gate
array
unit
that
it
acquired
when
it
bought
Xilinx.

Sales
in
AMD’s
gaming
segment
declined
8%
to
$1.5
billion,
because
of
fewer
“semi-custom”
chip
sales.
That’s
what
the
company
calls
its
business
that
makes
processors
for
consoles
like
Sony’s
PlayStation
5.

WATCH:

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