Chip large AMD (AMD) reported its second quarter earnings after the bell on Tuesday, beating analysts’ expectations on the highest and backside traces and posting better-than-anticipated steerage for the third quarter.
AMD, like rival Nvidia, is using the AI hype prepare, which is powering gross sales of its information middle graphics processing models (GPUs) and central processing models (CPUs). For the quarter, AMD reported adjusted earnings per share (EPS) of $0.69 and income of $5.8 billion. Wall Road was anticipating adjusted EPS of $0.68 on income of $5.7 billion, in accordance with consensus estimates by Bloomberg. AMD reported adjusted EPS of $0.58 on income of $5.4 billion in the course of the interval in 2023.
“Our AI enterprise continued accelerating and we’re effectively positioned to ship robust income progress within the second half of the 12 months led by demand for Intuition, EPYC and Ryzen processors,” AMD CEO Lisa Su stated in an announcement.
“The speedy advances in generative AI are driving demand for extra compute in each market, creating important progress alternatives as we ship management AI options throughout our enterprise.”
AMD’s Knowledge Heart income, which incorporates gross sales of AMD’s GPUs and CPUs, topped out at $2.8 billion, beating expectations of $2.75 billion. That is a 115% bounce versus the identical quarter final 12 months, when AMD reported Knowledge Heart income of $1.3 billion.
Shares of AMD rose as a lot as 5% following the report, whereas shares of rival Nvidia (NVDA) jumped 3%. Shares of Intel (INTC) have been flat.
AMD’s present prime GPU is its MI300X. Throughout a press convention on the Computex occasion in Taiwan in June, AMD stated companions and prospects, together with Microsoft, Meta, Dell, HPE, and Lenovo, are already adopting the chip. The corporate additionally revealed that its next-generation MI325X might be accessible starting in This autumn, whereas the MI350X will hit the market in 2025. AMD stated it should roll out the MI400 in 2026.
It isn’t simply AI that issues for AMD, although. Its Shopper section, which incorporates gross sales of chips for PCs, remains to be an necessary a part of its enterprise. For the quarter, the corporate reported income of $1.5 billion beating expectations of $1.45 billion, and up from $998 million in the identical interval final 12 months.
The Shopper section beat comes because the PC business continues its turnaround following a big slowdown after the explosive progress seen on the onset of the pandemic.
However that was 4 years in the past, and customers are starting to buy replacements for the PCs they purchased at the beginning of the pandemic. That, in accordance with IDC, has resulted in worldwide PC shipments growing 3% 12 months over 12 months within the second quarter, marking the second quarter of progress after eight consecutive quarters of declines.
Gaming income topped out at $648 billion in Q2, down 59% 12 months over 12 months however beating estimates of $646 billion.
Just like the PC business, the gaming business has additionally been contending with a slowdown in comparison with the high-flying sale days of the early pandemic period. Nonetheless, there’s hope for the gaming business going into the tip of 2024 and begin of 2025 as Nintendo prepares to launch its subsequent console and Take-Two readies its extremely anticipated “Grand Theft Auto VI” later subsequent 12 months.
AMD is the primary of the massive three chip corporations to report its earnings this quarter. Intel will comply with go well with on Aug. 1, whereas Nvidia will report its earnings on Aug. 28.
E mail Daniel Howley at dhowley@yahoofinance.com. Comply with him on Twitter at @DanielHowley.
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