AMD Crushes Earnings With Record Revenue On AI Chip And Gaming Demand
AMD's latest earnings are in and they reflect another record quarter with revenue boosting to $9.2 billion on strong gains across the board, including client and gaming products (think: Ryzen CPUs and Radeon GPUs). That figure represents a 20% sequential increase from AMD's previous record high, and is up 36% year-over-year. To put it in AMD CEO Dr. Lisa Su's own words, it was an "outstanding quarter."
"We delivered an outstanding quarter, with record revenue and profitability reflecting broad based demand for our high-performance EPYC and Ryzen processors and Instinct AI accelerators," Dr. Su said. "Our record third quarter performance and strong fourth quarter guidance marks a clear step up in our growth trajectory as our expanding compute franchise and rapidly scaling data center AI business drive significant revenue and earnings growth."
Big tech firms are benefiting from booming AI demand and AMD is no exception. Fueled by an expansive stack of EPYC processors (and in particular, strong demand for its 5th generation EPYC chips) and Instinct MI350 GPU accelerators, AMD's data center segment grew 34% sequentially and 22% year-over-year to $4.3 billion, resulting in over $1 billion in operating income.
Notably, the third quarter results do not include revenue derived from Instinct MI308 shipments to China. During an earnings call, however, Dr. Su revealed that AMD has "received some [export] licenses for MI308," so assuming no logistical snags, we anticipate those sales being reflected in its next earnings report.
AMD also saw growth in its Embedded segment, which posted an 8% year-over-year gain to $857 million, though its Client and Gaming division saw the biggest growth—the combined segment rose 73% year-over-year to $4 billion.
Breaking it down, the bulk of that came from its Client segment, which posted a record $2.8 billion in revenue (up 46% year-over-year). AMD attributed the gain to record sales of its Ryzen processors, as well as a "richer product mix." As part of that, Dr. Su said desktop processor sales hit an all-time high. She also noted a sharp increase in Ryzen-based laptops.
Gaming revenue, meanwhile, jumped 181% year-over-year to $1.3 billion. This was the result of higher semi-custom revenue and strong demand for Radeon GPUs. Dr. Su also highlighted "rapid adoption this quarter" AMD's FSR 4 upscaling technology, which saw the number of supported games double to more than 85.
Despite the strong earnings report, AMD's share price is down ahead of the opening bell. We're not financial advisors around these parts, but from our vantage point, it seems rooted in concerns that the market is due for a correction within the next year or so because of all the AI hype and growth. To that end, NVIDIA's share price is also down this morning.
Looking ahead, AMD anticipates its fourth quarter revenue settling at $9.6 billion, plus or minus $300 million.
