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AMD has published its latest set of financial results showing robust growth, but its AI forecast appears to have disappointed some.
The results, covering the third quarter of the 2024 financial year, saw the company turn in revenue of $6.8 billion, an 18% increase on the third quarter of the previous financial year. Profit was also up year on year: AMD made $3.4 billion in profit for the third quarter of this financial year, compared to nearly $2.8 billion in the same quarter last year. That’s a 24% rise.
The company’s CEO Dr Lisa Su told an earnings call that the growth was driven by sales of its Instinct GPUs, as well as its EPYC and Ryzen processors.
“We believe we gained server CPU share in the quarter as enterprise wins accelerated. Cloud providers expanded their use of EPYC CPUs across their infrastructure, and we began the initial ramp of fifth-gen EPYC processors,” Su said. She added that Airbus, Daimler Truck, FedEx, HSBC, Siemens and Walgreens were among enterprise clients expanding their EYPC use during the quarter and that Meta now has over 1.5 million EPYC processors across its data centres worldwide.
The data centre segment marked a high point for the company: sales rose 122% to $3.5 billion over the quarter.
AMD also upgraded its forecast for AI chip sales, raising its prediction for data centre GPU sales to over $5 billion for the 2024 financial year – $500 million more than it had previously predicted.
However, Su noted ongoing supply-side challenges: “Clearly, it’s a tight supply environment… And going into the next few quarters going into 2025, I think we expect that the environment will continue to be tight, but we’ve also planned for significant growth going into 2025.”
Investors did not respond favourably to the results, having hoped for even more impressive figures from the chipmaker. The company’s share price fell around 15% between 29 October, the day before the results were released, and 1 November. It’s thought that the drop was caused by analysts’ high expectations around the company’s AI chips, which sales didn’t match.
Elsewhere, AMD noted that client revenue was also on the rise, hitting $1.9 billion over the quarter, driven by the growing uptake of its Zen 5 processors. Su told the earnings call that AMD expects further gains when businesses refresh their PC estates after Windows 10 technical support ceases in 2025.
Gaming and embedded product sales, meanwhile, fared less well: the former saw revenue fall 69% year on year to $462 million, and the latter dropped to $927 million, down 25% year on year. Su attributed the fall in embedded products to seeing “customers normalise their embedded revenue”. “Embedded demand continues recovering gradually, led by strength in test and emulation offset by ongoing softness in the industrial market,” she added.
Su was upbeat about the company’s performance in the near future. “Looking out over the next several years, we see significant growth opportunities across our Data Center, Client and Embedded businesses driven by the nearly insatiable demand for more computing,” she said.
