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Advanced Micro Devices, or AMD is the second-biggest maker of graphics processing units, or GPUs, for AI behind Nvidia, which has the vast majority of the market. But big AI customers such as Meta and OpenAI are increasingly seeking to AMD for alternative to Nvidia’s pricey chips.
AMD reported quarterly earnings that missed estimates, which pushed share of AMD to slid about 5% in extended trading. Here’s the brief details of the chipmaker's earning result for the quarter that ended in June:Earnings per share: 48 cents adjusted vs. 49 cents expected; Revenue: $7.69 billion vs. $7.42 billion expected.
For the current quarter, AMD expects sales of $8.7 billion, plus or minus $300 million, versus expectations of earnings of $8.3 billion. Net income is $872 million, or 54 cents per share, increasing from $265 million, or 16 cents per share in the year-ago period. Nvidia’s overall sales rose 32% in the period from $5.84 billion a year earlier.
During the quarter, AMD announced new AI chips called the Instinct MI400 that are expected to hit the market next year. OpenAI CEO Sam Altman committed to using AMD’s newest GPUs.
AMD is also grappling with chip export controls that have been placed on some of its AI chips because the U.S. worries that powerful GPUs could be used by competitors to surpass American capabilities or be used for military purposes.
AMD CEO Lisa Su said AI business revenue declined year over year as U.S. export restrictions effectively eliminated MI308 sales to China, and the company began transitioning to its next generation. AMD said its outlook doesn’t include any revenue from its China-focused AI chip called the MI308 and its license applications are currently being reviewed by the Department of Commerce. Su said she expected AI revenue to grow year over year in the current quarter. Su indicated that the company’s newest AI chip, called Instinct MI350, was competitive with Nvidia’s GB200 chips for training and inference. AMD is in discussion with large customers to build out clusters based on the company’s AI chips. The other major segment for AMD is called Client and Gaming, which includes the company’s CPUs for laptops and desktops, and its GPUs for 3D gaming. That was up 69% on an annual basis to $3.6 billion. Client revenue rose 57% to $2.5 billion, in line with the expectations of $2.56 billion, partially driven by strong demand for the company’s latest desktop CPUs, which it calls AMD Ryzen Zen 5.Complete digital access to quality Glebors financial topic with expert analysis from industry leaders.
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