AMD Chair and CEO Lisa Su speaks on the AMD Keynote address through the Consumer Electronics Show (CES) on January 4, 2023 in Las Vegas, Nevada.
Robyn Beck | AFP | Getty Images
AMD reported third-quarter earnings on Tuesday that beat analyst expectations, though the chipmaker issued a weaker-than-expected forecast.
Here’s how the corporate did versus LSEG (formerly Refinitiv) consensus estimates for the quarter led to September:
- EPS: 70 cents, adjusted, versus 68 cents expected
- Revenue: $5.8 billion, versus $5.7 billion expected
For the fourth quarter, AMD said it expects about $6.1 billion in sales, while analysts were on the lookout for revenue of $6.37 billion.
AMD is one among the few chipmakers capable of constructing the type of high-end graphics processing units (GPUs) needed to coach and deploy generative artificial intelligence models. That market is dominated by Nvidia. AMD said its forthcoming AI chips, the MI300A and MI300X, are “on the right track” for volume production in the present quarter.
The stock initially dropped about 4% in prolonged trading but recovered after the corporate gave a rosy 2024 forecast for its AI chip business.
“We now expect data center GPU revenue to be roughly $400 million within the fourth quarter and exceed $2 billion in 2024 as revenue ramps all year long,” AMD CEO Lisa Su said on the earnings call.
Net income within the third quarter rose to $299 million, or 18 cents per share, from $66 million, or 4 cents per share a yr ago. Revenue increased 4% from $5.6 billion a yr earlier.
Data center, which incorporates AMD’s server processors and AI chips called GPUs, reported $1.6 billion in sales, flat from a yr earlier. AMD said its sales of server CPUs grew. The chipmaker added it expects strong growth in its data center business within the fourth quarter.
“We would love to be a major player on this market,” Su said.
On the decision, Su also mentioned recent AI acquisitions and enhancements in the corporate’s AI software suite.
“I feel all of us see the expansion in generative AI workloads and the actual fact is we’re just on the very early innings of individuals truly adopting it for enterprise business productivity applications,” Su said.
Revenue in AMD’s Client group, which incorporates sales from PC processors, rose 42% yr over yr to $1.5 billion, driven by PC chips.
Last week, chief rival Intel reported third-quarter earnings that beat expectations for profit and sales, but still showed a revenue decline yr over yr.
AMD’s embedded segment revenue was off 5% to $1.2 billion, which the corporate blamed on a weak communications market. That features parts for networking in addition to the corporate’s field programmable gate array unit that it acquired when it bought Xilinx.
Sales in AMD’s gaming segment declined 8% to $1.5 billion, due to fewer “semi-custom” chip sales. That is what the corporate calls its business that makes processors for consoles like Sony’s PlayStation 5.
WATCH: Wedbush’s Matt Bryson reacts to AMD’s Q3 earnings
![Wedbush's Matt Bryson reacts to AMD's Q3 earnings as stock slips on lower-than-expected guidance](https://image.cnbcfm.com/api/v1/image/107326473-16987844521698784449-31829026604-1080pnbcnews.jpg?v=1698784451&w=750&h=422&vtcrop=y)