AMD Q2 Earnings: AI Chip Sales Spark Market Share Grab
Today, AMD announced its second-quarter 2024 results, which exceeded overall expectations. The market remains optimistic about AMD’s third-quarter 2024 performance, as indications of accelerated AI chip sales suggest the company is gaining market share from competitor NVIDIA, driving revenue growth and boosting stock prices significantly in after-hours trading.
In the second quarter of 2024, AMD’s revenue was $5.835 billion, a 9% increase from $5.359 billion in the same period last year and a 7% rise from $5.473 billion in the previous quarter. Net profit stood at $265 million, an astonishing 881% increase from $27 million the previous year, though it represented a 115% decline from $123 million in the prior quarter. Gross margin was 49%, up from 46% year-over-year and 47% from the previous quarter. Diluted earnings per share were $0.16, a remarkable 700% increase from $0.02 last year and a 129% rise from $0.07 in the prior quarter.
The Data Center segment’s revenue reached $2.834 billion, up 115% year-over-year and 21% quarter-over-quarter, primarily driven by the increased sales of the Instinct MI300 series compute cards, which exceeded $1 billion this quarter. The Client segment’s revenue was $1.492 billion, a 49% year-over-year and 9% quarter-over-quarter increase, benefiting from the PC market’s recovery and increased Ryzen processor sales. The Gaming segment’s revenue was $648 million, a 59% year-over-year and 30% quarter-over-quarter decline, attributed to reduced semi-custom business income. The Embedded segment’s revenue was $861 million, down 41% year-over-year but up 2% quarter-over-quarter, continuing to be affected by customer inventory adjustments.
AMD forecasts third-quarter 2024 revenue to be approximately $6.7 billion, with a variance of $300 million, aligning with market expectations. Additionally, the non-GAAP gross margin is anticipated to be around 53.5%. Dr. Lisa Su, AMD’s CEO, stated that the sales forecast for the Instinct MI300 series in 2024 has been revised to $4.5 billion, up from the previous $4 billion, accounting for about 15% of total sales. She also confirmed the upcoming release of the Instinct MI325X later this year and the next-generation CDNA 4 architecture in 2025.
