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AMD CEO Lisa Su speaks at the company’s AI event in San Francisco in July.Juliana Yamada/The Associated Press
AMD AMD-Q forecast quarterly revenue above Wall Street estimates on Tuesday, banking on strong demand for its chips from massive data-centre capacity expansions to power AI technologies.
Shares of the Santa Clara, Calif.-based company, however, fell over 8 per cent in extended trading.
The company is regarded as chip giant Nvidia’s NVDA-Q closest rival in the market for graphics processing units, as major technology companies and governments worldwide ramp up spending on AI infrastructure.
AMD has stepped up its AI product launches and moved beyond selling individual chips to offering AI systems that combine processors, networking gear and related hardware, giving customers an integrated AI infrastructure option and allowing it to better rival Nvidia’s rack-scale offerings.
The company expects third-quarter revenue of about US$13-billion, plus or minus US$300-million, while analysts estimate US$12.52-billion, according to data compiled by LSEG.
Adjusted gross margin is expected to be about 56 per cent, largely in line with the estimate.
While GPUs dominate heavy AI training, AMD is also benefiting from growing demand for central processing units, which are used alongside pricey graphics processors in servers. This has helped AMD capture market share from Intel.
Supply, however, is constrained by AMD’s reliance on TSMC , the world’s largest contract chipmaker, where tight advanced packaging capacity continues to be a key hurdle.
The forecast suggests that AMD’s multibillion-dollar investments to challenge chip giant Nvidia’s dominance in the market for AI chips are beginning to pay off, with sales of its data-centre processors accelerating sharply.
Second-quarter revenue rose 50 per cent to US$11.54-billion, beating the estimate of US$11.28-billion. Data-centre revenue more than doubled to US$6.72-billion, also exceeding expectations of US$6.48-billion.
Adjusted profit came in at US$1.66 per share, ahead of the estimated US$1.62. At AMD’s AI event in July, CEO Lisa Su said the company’s second-generation Helios AI servers, featuring the MI455X AI accelerator and “Venice” processor made by TSMC, are in full production and would begin shipping in the coming months.
