AMD Foresees $2 Billion in AI Chip Sales Next Year Despite Soft Q4 Outlook

Advanced Micro Devices (AMD) exceeded expectations in Q3 but gave a cautious Q4 forecast. AMD aims to make a significant impact in AI chip sales next year.

In Q3:

• AMD earned 70 cents per share, beating the expected 68 cents.
• The revenue was $5.8 billion, surpassing the $5.7 billion expectation.

For Q4, AMD predicts around $6.1 billion in sales, slightly less than the expected $6.37 billion.

AMD is one of the few capable of making high-end GPUs needed for AI models. This market is usually dominated by Nvidia. AMD’s AI chips, MI300A and MI300X, are set for production this quarter.

Although AMD stock initially fell 4% in after-hours trading, it rebounded with a positive 2024 outlook for the AI chip business.

AMD’s CEO, Lisa Su, expressed optimism during the earnings call, expecting data center GPU revenue to reach about $400 million in Q4 and surpass $2 billion in 2024.

In Q3, AMD’s net income reached $299 million, or 18 cents per share, up from $66 million or 4 cents per share last year. Revenue also grew by 4% from $5.6 billion a year ago.

Sales in AMD’s data center segment, including server processors and AI GPUs, remained at $1.6 billion, with growing server CPU sales. The company anticipates strong growth in this segment in Q4.

Lisa Su emphasized AMD’s ambition to become a major player in this market, highlighting the potential in generative AI workloads for enterprise applications. She also noted recent AI acquisitions and improvements in AMD’s AI software suite, recognizing the increasing interest in generative AI for business productivity.

In AMD’s Client group, which includes PC processors, revenue increased by 42% YoY to $1.5 billion, primarily from PC chip sales.

However, AMD’s embedded segment revenue dropped by 5% to $1.2 billion due to a weak communications market, including networking components and the field programmable gate array unit obtained through the Xilinx acquisition.

AMD’s gaming segment saw an 8% decline in sales, totaling $1.5 billion, mainly due to fewer “semi-custom” chip sales for consoles like Sony’s PlayStation 5.

Despite the cautious Q4 outlook, AMD maintains a positive outlook for its AI chip business, positioning itself as a key player in the growing AI market. With a strong focus on generative AI and a growing suite of AI solutions, the company anticipates substantial growth in the years ahead.

As we dive into the exciting world of technology and innovation on ImpactWealth.Org, it’s clear that Advanced Micro Devices (AMD) is on a trajectory to revolutionize the AI chip market.  With a dedicated focus on generative AI and continuous improvement in AI software, AMD’s journey in the AI sector is one that we’ll be closely following, and it’s poised to make a lasting impact on the technology landscape. Stay tuned for more updates and insights on the fascinating tech advancements shaping our world on ImpactWealth.Org.