AMD says it will sell $4 billion in AI chips this year, inventory drops on in-line forecast

Lisa Su, president and CEO of AMD, talks about the AMD EPYC processor for the length of a keynote tackle at the 2019 CES in Las Vegas, Nevada, U.S., January 9, 2019.

Steve Marcus | Reuters

AMD reported first-quarter earnings and gross sales on Tuesday that were a limited sooner than Wall Road expectations, and supplied an in-line forecast for the sizzling quarter.

AMD shares dropped 7% in prolonged procuring and selling.

Right here’s how it did versus LSEG consensus expectations for the quarter ending in March:

  • Earnings per portion: 62 cents adjusted versus 61 cents expected
  • Revenue: $5.47 billion vs. $5.46 billion expected.

AMD said it expects about $5.7 billion in gross sales within the sizzling quarter, consistent with Wall Road estimates of the a similar approximate complete. That would describe about 6% annual boost.

The firm reported find income of $123 million, or 7 cents per portion, versus a find loss of $139 million, or 9 cents per portion, for the length of the year-earlier duration. Revenue used to be up about 2% from a year earlier.

AMD shares possess risen 14% to this point in 2024, so despite assembly forecast estimates, and signaling swiftly AI chip boost, Tuesday’s outcomes were no longer sufficient to forestall the inventory from sliding.

AMD said its closely-watched Files Heart section grew 80% on a year-over-year basis to $2.3 billion thanks to gross sales of its MI300 AI chip, which competes with Nvidia’s AI graphics processors.

But investors are extra attracted to the firm’s AI chips. AMD CEO Lisa Su said that its MI300X Ai chip used to be in exercise at Microsoft, Meta, and Oracle. AMD said it had supplied over $1 billion of the AI chips since it launched within the fourth quarter of 2023.

AMD expects $4 billion in 2024 AI chip gross sales, up from a $3.5 billion forecast in January. For comparability, Nvidia, which is the splendid vendor of AI server chips, reported $18.4 billion in gross sales — mostly AI chips — in its knowledge center section by myself for the January quarter, primarily the most in model for which monetary outcomes are readily available.

Su steered investors on Tuesday that the firm used to be already working on novel AI chips and successors to the sizzling skills. “We’re getting mighty closer to our top AI customers. They’re truly giving us significant feedback on the highway map,” Su said.

AMD also makes central processors which can perchance perchance perchance be in most cases paired with developed AI chips in servers. Su steered analysts on a name that the firm believed it had taken market portion within the server CPU section — possible from Intel. Su said that AMD sees “signs of improving ask” for its CPUs attributable to the AI server boost.

AMD’s weakest division used to be its gaming section, which used to be down Forty eight% on an annual basis to $922 million, which the firm said used to be attributable to decrease chip gross sales for sport consoles and PCs. AMD makes chips for Sony’s PlayStation 5, as an instance. AMD’s gaming gross sales trailed a StreetAccount estimate of $969 million.

AMD’s normal industry, processors for chips and PCs, is reported as client section earnings. AMD reported $1.4 billion in first-quarter gross sales, a 85% annual expand, suggesting that final year’s PC inch is over. AMD is also highlighting its chips being in a position to bustle artificial intelligence programs within the community, which would enable it to energy so-called “AI PCs” that many industry participants are banking on to force novel notebook computer and desktop gross sales.

The firm’s embedded section, made up of products purchased as section of the Xilinx acquisition in 2022, reported falling gross sales, losing 46% on an annual basis to $846 million, lagging Wall Road expectations of $942 million.

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