
On Tuesday, AMD reported their third-quarter earnings. They are one of the few chip manufacturers capable of creating the high-end GPUs necessary to train and utilize generative AI systems. AMD forecasted that their sales of AI GPUs could break the $2 billion mark in 2024.
AMD's third-quarter earnings reported on Tuesday beat analyst expectations, although the chipmaker gave a weaker-than-anticipated outlook. Earnings per share came in at 70 cents, adjusted, versus 68 cents expected, while revenue was $5.8 billion compared to the projected sum of $5.7 billion. Regarding the fourth quarter, AMD predicted sales of about $6.1 billion, compared to the anticipated $6.37 billion from LSEG (formerly Refinitiv).
The company is among the few firms that can produce the sophisticated graphics processing units (GPUs) essential for training and deploying generative AI models, a sector dominated by Nvidia. AMD insisted that its upcoming MI300A and MI300X AI chips will commence volume production in the current quarter. Despite the stock dipping by about 4% in extended trading, it recovered afterwards due to the upbeat prediction for its AI chip business in 2024. This should result in data center GPU revenue of ca. $400 million in the fourth quarter and more than $2 billion during the year.
Dr. Lisa Su, CEO of AMD, said on the earnings call that they desire to become a major actor in the AI market, referencing acquisitions and advancements in their AI software package. Client-related sales, which incorporate PC processors, climbed 42% from last year to $1.5 billion, while the embedded segment experienced a 5% decrease to $1.2 billion, primarily due to a feeble communications market. Gaming chip sales, including processors for consoles such as the PlayStation 5, went down by 8% to $1.5 billion.
Previously, Intel posted third-quarter earnings that surpassed expectations for profit and sales, yet still displayed a yearly revenue decline. Wedbush's Matt Bryson commented on AMD's Q3 results.
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