AMD Shares Rebound After Chipmaker Posts Q2 Beat, Guidance Tops Expectations: CEO Lisa Su Says AI Business Accelerating (UPDATED)

Editor’s note: This story has been updated with additional details on performance in AMD business segments.

Chipmaker Advanced Micro Devices, Inc. AMD reported Tuesday after the market close with second-quarter earnings and revenue that increased year-over-year amid strength in data center revenue and fairly positive performance in the client business. The guidance for the running quarter also came in ahead of expectations. Reacting to the results, the semiconductor stock was up 4.8% in after-hours trading.

AMD Q2 Earnings Takeaways:: Santa Clara, California-based AMD belied pessimism surrounding a possible cutback in orders from Microsoft flagged by analysts and the formidable threat posed by artificial intelligence frontrunner Nvidia Corp. NVDA. Here’s how the headline numbers compare to Street estimates and comparable metrics from the prior-year periods.

	Q2’24 Actuals	Q2’24 Consensus*	Q2’24 Guidance	Y-o-Y Change	Q-o-Q Change
Revenue	$5.84B	$5.724B	$5.7B +/- $300 M	+9%	+7%
Non-GAAP EPS	69 cents	68 cents	N/A	+19%	+11%
Non-GAAP gross margin	53%	N/A	53%	+3 points	+1 point

Rival Intel Corp. INTC, which typically reports ahead of AMD, is scheduled to announce its quarterly results on Thursday. Intel is expected to report a 23% year-over-year drop in earnings per share and flattish revenue.

Commenting on AMD’s results, CEO Lisa Su said: “We delivered strong revenue and earnings growth in the second quarter driven by record Data Center segment revenue.

“Our AI business continued accelerating and we are well positioned to deliver strong revenue growth in the second half of the year led by demand for Instinct, EPYC and Ryzen processors. The rapid advances in generative AI are driving demand for more compute in every market, creating significant growth opportunities as we deliver leadership AI solutions across our business.”

Ahead of the results, Rosenblatt’s Hans Mosesmann called for an in-line second-quarter print and a slight upside to third-quarter guidance, underpinned by AI momentum, share gains in general purpose x86 CPUs, seasonal PC/gaming and stabilizing embedded Xilinx market segment.

See Also: Is Advanced Micro Devices (AMD) Stock a Good Buy?

AMD's Businesses — How They Did In Q2: The company clocked record data center revenues and its client business saw both sequential and year-over-year revenue increases. It attributed the data center strength to a steep ramp of AMD Instinct GPU shipments, and strong growth in fourth-gen AMD EPYC CPU sales.

Strong Ryzen processors propped up the client business. The client business is exposed to the PC market, which grew at 3% year-over-year in the second quarter, according to IDC. China was a sore spot and the quarter’s growth benefited from easier comparisons, it added.

	Q2’24 Revenue	% of Total Revenue*	Y-o-Y Growth	Q-o-Q Growth
Data Center	$2.8B	48%	+115%	+21%
Client segment	$1.5B	27%	+49%	+9%
Gaming segment	$648 million	11%	(-59%)	(-30%)
Embedded segment	$861 million	15%	(-41%)	+2%

AMD Q3 Outlook: For the third quarter, AMD expects revenue of $6.7 billion plus or minus $300 million against Street estimates of $6.61 billion. It guided to third-quarter non-GAAP gross margin of about 53.5%.

The Street models full-year earnings of $3.49 per share and revenue of $25.57 billion, marking increases of roughly 32% and 13%, respectively.

The focus now shifts to the earnings call hosted by AMD’s management at 5 p.m. EDT as the team weighs in on the outlook for the MI300 AI accelerators.

AMD Stock: The chipmaker’s stock has been a laggard, having fallen over 6% year-to-date. The iShares Semiconductor ETF SOXX and the SPDR S&P 500 ETF Trust SPY have rallied over 15% and 14.7%, respectively, during the same period.

AMD shares closed Tuesday’s regular session at $138.44, down 0.94%, according to Benzinga Pro data.

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Photo courtesy of AMD.