AMD earnings report Q3 2024

Superior Micro Units reported third-quarter outcomes Tuesday, with earnings in step with forecasts and income that barely beat expectations.

This is how the corporate did, in contrast with LSEG estimates for the quarter ending Sept. 28:

• Earnings per share: 92 cents adjusted vs. 92 cents anticipated
• Income: $6.82 billion vs. $6.71 billion anticipated

AMD mentioned its necessary information heart enterprise doubled in gross sales for the second quarter in a row, however total income steering for the fourth quarter was in step with consensus expectations.

AMD shares fell 7% on Tuesday in prolonged buying and selling.

AMD mentioned it anticipated about $7.5 billion in gross sales within the present quarter, in step with consensus expectations of $1.16 in adjusted earnings per share on $7.54 billion in income. That will be a 22% year-over-year decline for the December quarter.

The chipmaker reported web revenue of $771 million, or 47 cents per share, in contrast with $299 million, or 18 cents per share, a 12 months in the past. Total imply absolute deviation, or MAD, income was up 18% on an annual foundation.

AMD shares are up about 20% up to now in 2024, though rivals corresponding to Nvidia and Broadcom have had a lot better beneficial properties throughout the identical interval, pushed by the growing demand for AI chips. AMD is the second-largest vendor of information heart graphics processing items, or GPUs, that are used to coach and deploy massive generative AI fashions.

In October, AMD introduced a brand new synthetic intelligence chip referred to as the MI235X and mentioned it anticipated the AI GPU market to be price $500 billion by 2028. The corporate mentioned on Tuesday that it anticipated $5 billion in AI chip gross sales this 12 months, up from a earlier forecast of $4.5 billion.

“Buyer and associate curiosity for MI325X is excessive. Manufacturing shipments are deliberate to begin this quarter,” mentioned AMD CEO Lisa Su on a name with analysts.

AMD’s AI chips are reported in its information heart section, which greater than doubled on an annual foundation to $3.5 billion in complete gross sales. AMD mentioned it was primarily pushed by the robust gross sales of its Intuition-branded GPUs for AI. Total information heart income was up 122% 12 months over 12 months. Su mentioned that AMD nonetheless sees a whole lot of demand from cloud suppliers and different corporations to construct out AI infrastructure.

AMD’s gross margin expanded to 54%, which the corporate mentioned was due to increased information heart income.

AMD additionally makes central processing chips for laptops and servers. PC gross sales are reported in AMD’s consumer section, which grew 23% in the course of the quarter to $1.9 billion. Throughout the quarter, AMD’s chips have been included in high-end laptops marketed by Microsoft as “Copilot+” machines that may run superior AI included with Home windows.

AMD additionally makes chips for gaming consoles and PCs. Its gaming class slumped, with gross sales sliding 68% 12 months over 12 months, which the corporate blamed on a lower in “semi-custom income,” which incorporates {custom} chips for sport consoles such because the Sony PlayStation 5.

The corporate’s embedded enterprise, which incorporates less-expensive chips for business and different purposes, fell 25% yearly to $927 million in gross sales.