AMD Data Center Sales More Than Double

Advanced Micro Devices (AMD) announced its second-quarter earnings on Tuesday, surpassing Wall Street's revenue expectations with reported sales of $5.84 billion, compared to the anticipated $5.72 billion. The company also projected approximately $6.7 billion in sales for the current quarter, exceeding analysts' expectations of $6.61 billion. AMD's net income rose significantly to $265 million, or 16 cents per share, up from $27 million, or 2 cents per share, in the same quarter last year. Despite these positive results, AMD's stock has declined about 6% year-to-date, while its competitor Nvidia has seen its stock more than double, largely due to the high demand for AI graphics processing units (GPUs). Nvidia has established itself as the preferred choice for AI chip needs, particularly for applications like ChatGPT. Earlier this year, AMD projected $4 billion in AI chip sales, representing about 15% of its expected total sales. CEO Lisa Su highlighted the company's "higher than expected" sales of AI chips, noting that revenue from its MI300 chips alone exceeded $1 billion during the quarter. The Data Center segment, which includes AI chip sales, experienced a remarkable 115% year-over-year growth, reaching $2.8 billion, surpassing the $2.75 billion forecast by analysts. In contrast, AMD's Client segment, which focuses on central processors for laptops and servers, reported a 49% increase in sales to $1.5 billion, exceeding expectations. However, the gaming segment saw a significant decline, with revenues dropping 59% year-over-year to $648 million, falling short of the $676 million forecast. The embedded segment, bolstered by the Xilinx acquisition, reported $861 million in sales, slightly above expectations but down 41% from the previous year.