AMD (NASDAQ:AMD) reported first-quarter results that slightly surpassed Wall Street expectations, with earnings of 62 cents per share on revenue of $5.47 billion, compared to consensus expectations of 61 cents per share on revenue of $5.46 billion.
Despite these results, AMD shares fell over 3% in extended trading.
Current quarter outlook
Looking ahead, AMD anticipates sales of about $5.7 billion for the current quarter, aligning with Wall Street estimates and indicating a 6% year-over-year growth.
This forecast comes as the company rebounds from a previous net loss, reporting a net income of $123 million, or 7 cents per share, compared to a net loss of $139 million, or 9 cents per share, in the same period last year.
AMD Data Center segment grows 80%
AMD’s Data Center segment showcased significant growth, with an 80% increase from the previous year to $2.3 billion, largely due to robust sales of its MI300 AI chip.
This product competes directly with Nvidia’s AI graphics processors, and AMD has sold over $1 billion of these chips since their launch in the fourth quarter of 2023.
Gaming and client segments
The company’s gaming segment, however, did not perform as well, with revenues declining 48% year-over-year to $922 million.
This drop was attributed to lower chip sales for game consoles and PCs, including those used in Sony’s Playstation 5.
In contrast, AMD’s client segment, which includes processors for chips and PCs, reported a substantial 85% annual increase to $1.4 billion, signaling a recovery from last year’s PC market slump.
Challenges in the embedded segment
AMD’s embedded segment, which includes products from the 2022 Xilinx acquisition, faced challenges, with sales falling 46% on an annual basis to $846 million. This decline highlights some ongoing integration and market challenges within this unit.
Future developments
AMD officials are expected to provide further details on the performance of the MI300 sales and other key products during an upcoming earnings call with analysts.
The company is emphasizing its capabilities in powering AI PCs, which are expected to drive new sales in the laptop and desktop markets.
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