AMD Stock Surges on Record Data Center Revenue

31 Jul 2024

Investopedia

Key Takeaways

Advanced Micro Devices reported second-quarter sales that surpassed analysts' expectations.The chipmaker's top-line gains came as data center revenue more than doubled year-over-year to a record high as AI demand surged.AMD's revenue forecast for the third quarter also beat estimates, with the chipmaker saying it expects to "deliver strong revenue growth in the second half of the year."

Advanced Micro Devices (AMD) reported second-quarter sales that beat analysts' expectations, driven by record revenue from its data center segment.

The chipmaker posted revenue of $5.8 billion, up 9% from the year-ago period and above the analysts' estimates. Net income at $265 million or 16 cents per share missed projections, though excluding one-time items, adjusted earnings of 69 cents per share beat estimates.

AMD's Data Center Revenue Doubles as AI Demand Booms

AMD’s top-line gains came as data center revenue more than doubled year-over-year to a quarterly record of $2.8 billion, as demand for the company's artificial intelligence (AI) chips surged.

“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," AMD CEO Lisa Su said.

AMD said it anticipates $6.7 billion in sales in the third quarter, slightly higher than analysts expected, according to estimates compiled by Visible Alpha.

Su said the company expects to “deliver strong revenue growth in the second half of the year led by demand for Instinct, EPYC and Ryzen processors."

Shares of AMD jumped more than 7% to $138.44 in extended trading as of 6:20 p.m. ET Tuesday following the company's earnings release.