AMD's AI Push Gains Momentum with Record Data Center Revenue and Strong MI300 Outlook

Nvidia Stock Is Up 173% in 2024, but Here's Another Super Semiconductor Stock to Buy Hand Over Fist, According to Wall Street | The Motley Fool

Investors who own Nvidia stock might benefit from adding its top competitor to their portfolio. Nvidia (NVDA 1.99%) CEO Jensen Huang thinks data center operators will spend $1 trillion upgrading their infrastructure over the next five years in order to support demand from artificial intelligence (AI) developers. Part of that money will be spent on graphics processing units (GPUs), which are the optimal chips for AI training and AI inference. Nvidia is the top supplier of data center GPUs, and its stock has soared 173% in 2024 on the back of powerful sales growth. However, competition is ramping up, and Advanced Micro Devices (AMD -1.53%) launched its own GPUs, which have attracted some of Nvidia's biggest customers so far. The Wall Street Journal tracks 56 analysts who cover AMD stock, and the overwhelming majority have given it the highest possible buy rating. Not to mention, there isn't a single analyst who recommends selling. Here's why AMD stock might be a great buy right now, especially for investors who already own Nvidia. Nvidia's flagship H100 data center GPU went into production in September 2022, and it helped the company capture an estimated 98% market share in 2023 as there was practically no competition. That was until AMD launched the MI300X GPU in December, and despite being over a year behind, uptake has been very promising in 2024. The MI300X is now used by many of Nvidia's top customers, including Microsoft, Oracle, and Meta Platforms. According to AMD, many of them are yielding better performance and a lower cost of ownership by using the MI300X compared to the H100, which is a positive sign in the company's quest to take market share from Nvidia. AMD will start shipping its new MI325X to customers this quarter, which delivers up to 20% better AI inference performance than Nvidia's H200 (which superseded the H100 earlier this year). Since AI developers often rent computing capacity from data center operators on a per-minute basis, any improvement in speed can result in substantial cost savings. However, investors are already looking ahead to AMD's MI350 series, which is expected to reach customers in the second half of 2025. It's based on a new architecture called CDNA (Compute DNA) 4, which will deliver a performance boost of 35 times compared to CDNA-3-based GPUs like the MI300X. The MI350 is AMD's answer to Nvidia's latest Blackwell-based GPUs, which are the source of "insane" demand (according to Jensen Huang) and have just started shipping. But AI is quickly migrating from the data center and into computers and devices. AMD's new Ryzen AI 300 series of central processors (CPUs), neural processors (NPUs), and GPUs are designed to process AI workloads on-device, which reduces the reliance on external data centers to create a much faster user experience. Millions of Ryzen AI-powered PCs have been shipped already from leading manufacturers like Lenovo, Microsoft, and HP. Lenovo and HP plan to triple the number of Ryzen AI devices they offer by the end of 2024, and AMD expects there will be over 100 commercial platforms using the AI chips in 2025 as businesses seek to upgrade to the latest technology. AMD just reported its financial results for the third quarter of 2024 (ended Sept. 28), and the company delivered a record $6.8 billion in total revenue, which was an 18% increase from the year-ago period. However, there were some even stronger results beneath the surface of that headline number, thanks to AI. AMD's data center revenue soared 122% year over year to $3.5 billion, which was also a record, led by strong GPU sales. Coming into 2024, AMD CEO Lisa Su told investors the company could generate $2 billion in data center GPU revenue throughout the entire year, but that number is now set to come in at more than $5 billion. AMD's client segment -- which is home to the Ryzen AI series of chips -- grew revenue by 29% to $1.9 billion. Lisa Su believes the AI PC cycle is still in its very early stages, so investors should expect strong growth in this segment going forward. On the flipside, AMD delivered very weak results in its gaming segment. Revenue declined by 69% as demand slowed for consoles like Sony's PlayStation 5 and Microsoft's Xbox, and also because desktop PC gamers are waiting for AMD's next-generation GPUs, which will ship in 2025. AMD has delivered $3.00 in non-GAAP (adjusted) earnings per share over the last four quarters. Based on its stock price of $148.60 as of this writing, it trades at a price-to-earnings (P/E) ratio of 49.5. That makes it slightly cheaper than Nvidia stock, which trades at a P/E ratio of 63.1. Plus, Wall Street analysts (according to Yahoo) estimate AMD will generate $5.20 in earnings per share in 2025, placing its forward P/E ratio at just 28.6. Considering the stock market is a forward-looking machine, that might be the reason analysts have reached such a bullish consensus on AMD. Of the 56 analysts tracked by The Wall Street Journal, 39 have given AMD stock the highest possible buy rating. Eight others are in the overweight (bullish) camp, while nine recommend holding. At the top, I mentioned Jensen Huang's prediction that data center operators will spend $1 trillion on AI infrastructure over the next five years. Well, AMD believes the market for the chips alone will be worth $500 billion by 2028, representing a whopping 60% growth per year between now and then. Nvidia might be the frontrunner in capturing most of that value, but considering AMD's recent data center GPU sales growth and its innovation pipeline -- which includes the upcoming MI350 -- this company could be a serious threat over the next few years. Nvidia's market share will inevitably decline over time as competition grows, so for investors who already own that stock, buying AMD stock could be the ultimate hedge. But this stock might also be a fantastic long-term buy for investors who are diving into the AI chip space for the very first time.

AMD Stock Slides. Are There Cracks in the AI Infrastructure Story? | The Motley Fool

When it comes to chips for artificial intelligence (AI), Advanced Micro Devices (AMD -1.53%) continues to play second fiddle to leader Nvidia. However, it still benefits from the overall AI infrastructure build-out, as customers look to at least keep Nvidia (NVDA 1.99%) honest by getting some of their chips elsewhere. While AMD put up strong AI-related growth, investors nonetheless sold off the stock. The shares now trade just in positive territory on the year. Let's take a closer look at the chipmaker's third-quarter results to see if this is a buying opportunity or if this is a sign there could be some cracks in the AI buildout story for AMD. For the third quarter, AMD saw its sales rise 18% year over year to $6.8 billion. Adjusted earnings per share (EPS) came in at $0.92, up 31%. That was a nice acceleration in growth from Q2 when it saw sales rise 9% and adjusted EPS up 19%. Its data center business once again led the way as revenue soared 122% year over year to $3.5 billion and 25% sequentially. The segment was driven by sales of its Instinct graphics processing units (GPUs) and EPYC central processing units (CPUs). AMD said that its EPYC CPUs have gained big deployments at large cloud companies, such as Microsoft and Meta Platforms, as well as with enterprise customers such as Adobe, Boeing, and Nestle. Its client segment also showed strong growth, up 29% to $1.9 billion. This was led by demand for its Zen 5 processors. However, it saw big revenue declines in gaming, down 69% to $462 million, and embedded, down 25% to $927 million. Adjusted gross margins rose 250 basis points to 53.6% and were up 50 basis points sequentially. For the quarter, AMD generated free cash flow of $496 million. It ended the quarter with net cash and short-term investments of $4.5 billion and $1.7 billion in debt. Looking ahead, the company guided for Q4 revenue of $7.5 billion, give or take $300 million. That would represent growth of 22% at the mid-point, showing continued acceleration. It increased its full-year GPU data center revenue forecast from revenue of more than $4.5 billion to revenue now exceeding $5 billion. Looking out toward 2025, AMD said it remains positive about continued data-center growth as companies continue to make significant investments to build out their infrastructure to run AI workloads. It also said that customers are beginning to broaden their workloads running its GPUs. Like its larger rival Nvidia, AMD is seeing its growth driven by continued demand from the buildout of AI infrastructure. However, the company has found more success with AI inference, although it has made some inroads into large language model (LLM) training. While AMD is unlikely to challenge Nvidia's dominance, it is carving out a nice niche. Meanwhile, given how quickly the AI infrastructure market is growing, if it is able to gain just a little share, it will equal a lot of growth for the company moving forward. The impending acquisition of ZTE Systems (which designs and builds server, storage, accelerator, and other equipment for data centers) will help the company compete even better in the data center, allowing it to sell end-to-end system solutions that can incorporate its GPUs, CPUs, and networking equipment. This should also allow for faster deployments, which is something that should attract companies that have been racing to build out their data center infrastructure. From a valuation perspective, AMD trades at a forward price-to-earnings ratio (P/E) of 27.5 times next year's analyst estimates. Given the growth opportunities in front of it, that is a pretty reasonable valuation. While I still would prefer Nvidia in the space given its extraordinary growth, I do think AMD should continue to benefit from the AI-powered data center build-out. Also, the ZTE acquisition could set it up to make more inroads in the data center space. As such, I think investors can buy the stock on the recent dip, as I see no indication of any cracks in the AI infrastructure story.

AMD's Q3 Signals Accelerated AI Push With Record Data Center Revenue (NASDAQ:AMD)

Despite Nvidia's lead, AMD's focus on AI data centers offers high growth potential at more attractive valuation multiples. Continued AI demand and product cadence could drive re-pricing of AMD stock. Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the most reputable GPU makers. Although the company's stock advanced 70% since the ChatGPT release in November 2022, the truth is that it has lagged Nvidia ( Ex-trading desk at tradfi bankHead of Investment Research at KRIMaster in Finance Analyst's Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. This text expresses the views of the author as of the date indicated and such views are subject to change without notice. The author has no duty or obligation to update the information contained herein. Further, wherever there is the potential for profit there is also the possibility of loss. Additionally, the present article is being made available for educational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as an offering of advisory services or an offer to sell or solicitation to buy any securities or related financial instruments in any jurisdiction. Some information and data contained herein concerning economic trends and performance is based on or derived from information provided by independent third-party sources. The author trusts that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Analysts revisit AMD stock price targets after earnings

Advanced Micro Devices shares slumped in early Wednesday trading, dragging its six-month performance into negative territory, after a muted set of third-quarter earnings for the AI-chip maker failed to impress Wall Street. AMD (AMD) , which bills itself as the most comprehensive player in the AI-investment space, with divisions covering data centers, servers and personal computers, is attempting to crave into the market-share leadership of Nvidia (NVDA) with a new line of high-performance processors. The group's flagship AI-powering graphics processing unit, dubbed the MI300, is also seeing a surge in demand from hyperscaler clients such as Meta Platforms (META) as they ramp up spending to train their massive large-language-model datasets. Supplies remain tight, however, given capacity constraints at key assembly facilities and the surge in overall demand, leaving AMD, and others, to carefully manage investor expectations even as the longer-term story remains generationally compelling. "Our opportunities are amplified exponentially by the rapid adoption of AI, which is enabling new experiences that will make high-performance computing and even more essential part of our daily lives, Chief Executive Lisa Su told investors on a conference call late Tuesday. "In the data center alone, we expect the AI accelerator [total addressable market] will grow at more than 60% annually to $500 billion in 2028," she added. "To put that in context, this is roughly equivalent to annual sales for the entire semiconductor industry in 2023." AMD 'still clear #2' in AI accelerators: analyst The group's near-term outlook, however, appeared to disappoint investors as Su laid out a $5-billion-plus 2024 sales forecast for the MI300, as well as around $7.5 billion in fourth-quarter revenue with a gross margin of around 54%. "Our experts believe AMD is still a clear number 2 player in the AI accelerator market," said Third Bridge analyst Lucas Keh. "They have a good opportunity to gain incremental share from Nvidia (NVDA) with their 325x and 350 Instinct products amidst the current Blackwell delay concerns from major customers, as well as the growing need for compute resources." Related: AMD's biggest problem is a massive opportunity Cantor Fitzgerald analyst C.J. Muse, who carries a $180 price target on the stock, sees the MI300 line generating $12 billion in revenue over the medium-term. "We have no doubt they will get there, just whether it's 2025 or 2026," he said. "In the interim, we view [the] shares largely range-bound in the $150-$170 territory until we gain line of sight to this earnings power, which supports upside to our price target." KeyBanc Capital Markets analyst John Vinh was also encouraged by the MI300 outlook, as well as AMD's broader data center gains. But he noted that it was largely offset by slower growth in the group's gaming and embedded segments, the latter of which includes chips used in automotive and industrial applications. "In [the fourth quarter] AMD sees data center once again leading quarter-on-quarter growth and client showing incremental growth, while embedded and gaming would be more modest," Vinh said. "On a year-on-year basis, data center is expected to more than double and client to be up 29%, which is expected to offset the y/y declines in embedded and gaming." AMD's MI300 will top server sales Evercore ISI analyst Mark Lipacis, who raised his price target by $5 to $198 per share following last night's earnings report, sees growth in AMD's personal computing business as providing added support to the expected gains in the data center division. Ruben Roy of Stifel, meanwhile, reiterated his buy rating and $200 price target, estimating that MI300 sales would likely top overall server CPU revenue over the near term. "We continue to expect strong follow through on AI compute sales in 2025 as the MI325 series of processors ramps," said Roy. "While management noted that data center infrastructure builds at a handful of large customers can, at times, be lumpy, we continue to expect significant growth, particularly in the second half of the calendar year." Related: Analysts overhaul Alphabet stock price targets as Google parent soars "Management commentary was largely in line with our expectations, and we continue to expect AMD to benefit from a multiyear AI infrastructure investment cycle," he added. Goldman Sachs analyst Toshiya Hari also reiterated his 'buy' rating and $175 AMD price target, citing the growing adoption of the MI300 across hyperscalers such as Microsoft (MSFT) , Oracle (ORCL) and Meta. More AI Stocks: Hari, who trimmed his near-term earnings estimates following last night's updates, nonetheless sees "gains in traditional compute and the company's participation in AI compute driving revenue growth, margin expansion and earnings accretion over the medium- to long-run in excess of the industry average." AMD shares were marked 9.1% lower in early Wednesday trading to change hands at $151.07 each, a move that tips the stock into negative territory for the past six months. Related: Veteran fund manager sees world of pain coming for stocks

AMD Stock Drops On Q4 Outlook As 10 Analysts Highlight 'Long-Term AI Growth Opportunity,' Nvidia Rivalry - Advanced Micro Devices (NASDAQ:AMD)

Being second in market share to Nvidia might not be a bad thing, one analyst says. Advanced Micro Devices Inc AMD analysts make a case for the company to gain market share in several sectors as it works to compete against NVIDIA Corp NVDA and grow its AI business, as evidenced in third-quarter results. The AMD Analysts: KeyBanc analyst John Vinh reiterated an Overweight rating with a $220 price target. Cantor Fitzgerald analyst C.J. Muse reiterated an Overweight rating with a $180 price target. Oppenheimer analyst Rick Schafer maintained a Perform rating with no price target. Piper Sandler analyst Harsh Kumar reiterated an Overweight rating and lowered the price target from $200 to $180. Roth MKM analyst Suji Desilva maintained a Buy rating with a $200 price target. Truist analyst William Stein maintained a Hold rating with a $156 price target. Morgan Stanley analyst Joseph Moore maintained an Equal-weight rating and lowered the price target from $178 to $169. Goldman Sachs analyst Toshiya Hari maintained a Buy rating with a $175 price target. Northland Capital analyst Gus Richard maintained an Outperform rating with a $175 price target. Rosenblatt analyst Hans Mosesmann reiterated a Buy rating with a $250 price target. Read Also: AMD Q3 Earnings Preview: Can AI, Server Gains Help Narrow The Semiconductor Gap With Nvidia? KeyBanc on AMD: Data center segment revenue, up 122% year over year, was part of what Vinh called AMD's "solid results" in the third quarter. The analyst said MI300's outlook for 2024 to $5 billion was positive, but the company's fourth-quarter guidance came in below expectations. "While we are disappointed in 4Q guidance, we're encouraged by the strong results in Data Center across MI300 and server CPU," Vinh said. Vinh said the strong ramp of MI300 shipments could expand customer adoption in the cloud and AI sectors. Cantor Fitzgerald on AMD: The company's quarterly results were "disappointing" for Muse. The analyst said the key takeaway was MI300 doing well. "We have continued to point to $12B as the magic MI300 target to support $6.00 in earnings power," Muse said. The analyst believes the company will reach the figure, but the question is whether it will happen in 2025 or 2026. "In the interim, we view shares largely range-bound in the $150-$170 territory until we gain line of sight to this earnings power." Oppenheimer on AMD: The company's data center and AI segments were positives in the quarter for Schafer. "Mgmt's built an impressive AI franchise in short order. From nothing 12 months ago, AI is expected to contribute >$5B this year," Schafer said. The analyst said investor expectations are out of reach and the bar could be too high. "We expect Street numbers to come down Wednesday and remain sidelined until the path to sustained upside becomes clearer." Piper Sandler on AMD: The quarterly results show GPU execution but come with disappointing guidance, Kumar said in a new investor note. "The highlight of the call was that 2024 GPU revenues are expected to be above $5B, which had been the benchmark for investors," Kumar said. The analyst said AMD's GPUs and client and server businesses could stand out in the future, while gaming and embedded will be headwinds. "Overall, we continue to believe AMD is executing flawlessly on its GPU roadmap." Roth MKM on AMD: The company's data center business could have an upside to continue momentum, Desilva said in a new investor note. "We are encouraged that the company again raised its CY24 AI GPU revenue expectation with a healthy growth outlook into CY25," Desilva said. The analyst said AI revenue continues to show strength for the company. Truist on AMD: The stock price could need a modest "reset" after the disappointing fourth-quarter guidance, Stein said in a new investor note. The analyst said caution should be exercised given AMD's position in AI compared to NVIDIA Corporation and the company's X86 market, which is under pressure from competition. Morgan Stanley on AMD: A solid quarter from AMD might not be enough to offset a high bar for AI companies, Moore said in a new investor note. "We still see 2024-25 as investment years for the AI opportunity, and think revenue/earnings expectations are still too high," Moore said. The analyst said the risk reward for the stock remains balanced over the short term, with the company's AI product roadmap being key going forward. "We have also highlighted that expectations are even higher, and unless the view is that AMD can take market share in CY25, which we do not forecast, there won't likely be much sequential growth through the year." Goldman Sachs on AMD: The long-term AI growth opportunity remains for AMD, Hari said in a new investor note. "We foresee share gains in traditional compute and the company's participation in AI compute driving revenue growth, margin expansion and earnings accretion over the medium to long-run in excess of the industry average," Hari said. The analyst said they were encouraged by the company's progress in improving hardware and software offerings. Hari said future data could show that AMD is taking "meaningful share" in the enterprise market. Northland on AMD: The company could be narrowing the gap with Nvidia, Richard said in a new investor note. "AMD is #2 in Data Center AI and that is not a bad place to be," Richard said. The analyst said investors should consider buying the stock on Wednesday's pullback. Richard said AMD can continue to grow market share in segments like data center over time. Rosenblatt on AMD: The company showed market share gains in the quarter and should continue to gain share going forward, Mosesmann said in a new investor note. "At a high level, Lisa Su indicated an increasingly better competitive dynamic compared to the Nvidia H-series and B-series in 2025, as indicated by significant expansion in customer engagement and milestone accomplishments," Mosesmann said. AMD Price Action: AMD stock is down 9.8% to $149.96 at the time of publication Wednesday, versus a 52-week trading range of $94.07 to $227.30. AMD stock is up 8.5% year-to-date in 2024. Read Next: AMD Q3 Earnings On Deck: Mixed Signals On Charts As AI, Server Gains Take Focus Photo: jamesonwu1972/Shutterstock.com Market News and Data brought to you by Benzinga APIs

AMD's AI Data Center Business Booms: CEO Says It's 'Closed A Good Part Of That Gap' With Nvidia - Advanced Micro Devices (NASDAQ:AMD)

"In the Data Center alone, we expect the AI accelerator TAM will grow at more than 60% annually to $500 billion in 2028," Su says. Advanced Micro Devices, Inc. AMD CEO Lisa Su provided a deeper look into the future of AMD's data center AI business during the company's earnings call on Tuesday and shared her view on competition in the market. The Details: AMD reported strong growth in its Data Center segment operating income which more than tripled compared to the prior year and accounted for 52% of total revenue in the third quarter. On the company's post-earnings conference call, Su highlighted partnerships with major AI players Meta, Microsoft, Oracle and others and projected sales to exceed $5 billion for the year. Su attributed the growth to the ramp of AI data center GPU revenue "as MI300X adoption expanded with cloud, OEM, and AI customers." "Look, we've been extremely pleased with the progress there. I think the market environment has certainly gotten better over the last couple of quarters," Su said. Read More: AMD To Benefit From AI 'Competitive Arms Race': Goldman Sachs The CEO also sees room for even more growth in the company's Data Center AI business and the size of the total addressable market (TAM). "In the Data Center alone, we expect the AI accelerator TAM will grow at more than 60% annually to $500 billion in 2028. To put that in context, this is roughly equivalent to annual sales for the entire semiconductor industry in 2023," Su said. The AMD CEO sees the company's roadmap strengthening over time and "closing the gap" with chip giant Nvidia Corp. NVDA. "We have, with our accelerated road map, actually closed a good part of that gap. I think MI325 is a great product. It's going to compete very well with H200, and the MI350 series will compete very well with Blackwell," Su said on the conference call. She highlighted the spectrum of AI use cases and emphasized that there are "lots of opportunities across the set of AI workloads." Su also pointed to AMD's portfolio advantage from a data center retrofit standpoint because the infrastructure is the same and customers can update easily. "What I will say is customers are very, very open to AMD. And we see that everywhere we go, everyone is giving us a very fair shot at earning their business, and that's what we intend to do," Su said. AMD Price Action: According to Benzinga Pro, Advanced Micro Devices shares ended Wednesday's session 10.6% lower at $148.60. Read Also: Reddit Stock Soars After Strong Q3 Results, Q4 Guidance Above Estimates: DAUq's Grow 17% And More Image: Shutterstock Market News and Data brought to you by Benzinga APIs

AMD Data Center Revenue Soars 122% | The Motley Fool

Advanced Micro Devices exceeded expectations with strong data center growth despite challenges in the gaming and embedded segments. Advanced Micro Devices (AMD 3.96%), a leader in semiconductors and high-performance computing solutions, has reported its third-quarter 2024 earnings, outpacing both its guidance and investor expectations. The release, dated October 29, 2024, revealed that AMD achieved a revenue of $6.8 billion, exceeding its forecast of $6.7 billion. This works out to year-over-year growth of 18% and sequential growth of 17%. The company also reported a non-GAAP gross margin of 54%, slightly above its 53.5% guidance. Overall, the quarter reflected significant advancements particularly in AMD's data center and client computing segments, juxtaposed against challenges in the gaming and embedded markets. Source: SEC filings. Expectations based on management's guidance, as provided in 2024-07-30 earnings report. AMD is a major player in the semiconductor industry, known for its cutting-edge processors and graphics solutions used in various applications including personal computers and data centers. It competes with industry titans such as Intel and Nvidia. AMD's core business segments include Client, Data Center, Gaming, and Embedded, and it focuses on innovation through high-performance and adaptive computing solutions. Recently, AMD has concentrated its efforts on leveraging artificial intelligence (AI) and high-performance computing technologies. The company's strategic initiatives have emphasized technological innovation, underscoring its commitment to advancing AI capabilities and developing partnerships that strengthen its ecosystem. These efforts are crucial to maintaining its competitive edge, particularly amidst rapid AI advancements. The third quarter of 2024 marked a significant period of growth for AMD, with notable financial achievements and strategic developments. Record performance in the Data Center segment led to revenue of $3.5 billion, up a remarkable 122% year-over-year. This success stemmed from robust sales of Instinct GPUs and EPYC CPUs, emphasizing AMD's strong position in high-performance computing. In addition to the Data Center success, the Client segment also delivered strong results, boosting revenue to $1.9 billion, a 29% increase from the same period last year. This growth was driven by heightened demand for Ryzen processors based on the new Zen 5 architecture. However, AMD faced challenges in its Gaming and Embedded segments, with a 69% and 25% revenue decline respectively. These declines were largely due to inventory normalization and reduced demand for semi-custom products. Operating expenses slightly rose by 7% year over year, driven by investments in research and development (R&D). Despite rising expenses, operating margin significantly improved to 11%, up from 4% a year ago. Notably, management reaffirmed its financial health, emphasizing a Q4 2024 revenue outlook of $7.5 billion, with an unchanged non-GAAP gross margin of 54%. During the quarter, AMD also focused on strategic developments, enhancing its AI capabilities through acquisitions like Silo AI and announcing a pending acquisition of ZT Systems aimed at expanding its data center offerings. These initiatives underscore AMD's dedication to product and technological innovation, crucial for its sustained growth and market leadership. Looking forward, AMD expects continued growth driven by its Data Center and Client segments. Management has forecasted revenue growth for Q4 2024, projecting $7.5 billion with an anticipated sequential growth of 10%. New product launches, such as the next generation of EPYC processors and ramping production of next-generation Instinct AI accelerators, are expected to bolster this trajectory. Investors should watch for AMD's continued expansion in the AI segment and improvements in its product line, particularly as the company integrates recent acquisitions to enhance its technological capabilities. These strategic initiatives, alongside robust market demand for high-performance computing, suggest a promising outlook for the quarters ahead.

AMD Making 'Great Progress' With AI Giants: Jim Cramer Says AI Chip Story Is 'Not Just Jensen Huang' - Advanced Micro Devices (NASDAQ:AMD)

AMD CEO Lisa Su says chipmaker has made "great progress" with Meta, Microsoft, Oracle and a number of other AI players. Although NVIDIA Corp NVDA has dominated the AI chip market to date, Advanced Micro Devices, Inc. AMD CEO Lisa Su believes AMD will continue to see significant growth in the AI space -- and she's not alone. Wednesday on CNBC's "Squawk On The Street," Jim Cramer suggested AMD will play a huge role in the future of AI. What To Know: Cramer was an early supporter of Nvidia and a longtime fan of CEO Jensen Huang. The Jim Cramer Charitable Trust also owns shares of AMD as Cramer believes more than one chipmaker will rise in the AI revolution. "One of the reasons that we own your stock for the Charitable Trust and have for some time is we are firm believers that AI is so big that it actually has room for two players, that it's not just Jensen Huang and then nobody," Cramer said. "Could you make the case that actually you are a strong number two and getting stronger?" AMD CEO On AI: Su responded to Cramer, noting she is a "huge believer" in AI. The AMD CEO predicted that we are at the beginning of an AI supercycle and that AI will be used in "every aspect of computing." "Whether you're talking about the large clouds, enterprises, you're talking about the edge or you're talking about PC clients, you need all different sizes of compute for that and that's exactly what we have," Su said. AMD reported third-quarter results late Tuesday. Revenue of $6.8 billion came in ahead of estimates of $6.71 billion as Data Center sales jumped 122% year-over-year. Check This Out: What's Going On With Chip Stocks Nvidia, Broadcom, Taiwan Semi, Micron And Others Wednesday? Su told CNBC that when AMD introduced its MI300 AI GPUs near the end of last year, the company forecasted full-year 2024 sales of approximately $2 billion. Now the company's guidance is calling for sales of more than $5 billion. Over the past year, AMD has advanced partnerships and made "great progress" with Meta, Microsoft, Oracle and a number of other AI players, Su said. "And we're going to continue to do that, you know, going forward. So I think AI is really at the beginning and our goal is to be a very, very strong overall compute provider into that space," Su said. AMD Price Action: AMD shares were down 9.54%, trading at $150.47 at the time of publication Wednesday, according to Benzinga Pro. Read Next: Super Micro Computer Stock Dives As Auditor Resigns: What's Going On? Photo: Shutterstock. Market News and Data brought to you by Benzinga APIs

AMD Q3 Earnings Preview: Can AI, Server Gains Help Narrow The Semiconductor Gap With Nvidia? - Advanced Micro Devices (NASDAQ:AMD), AOT Growth and Innovation ETF (NASDAQ:AOTG)

Rosenblatt sees a 60% upside for AMD, driven by EPYC server CPUs and MI300 GPUs, with a price target of $250. Advanced Micro Devices Inc. AMD is set to report third-quarter 2024 earnings on Tuesday, Oct. 29, after the market close. The third-largest U.S. semiconductor company by market capitalization -- behind Nvidia Corp. NVDA and Broadcom Inc. AVGO -- has significantly lagged behind its industry peers year to date. Will AMD's third-quarter earnings signal an inflection point, setting the stage for a comeback, or will the performance gap with top competitors continue to widen from here? Chart: AMD Has Sharply Underperformed Nvidia Year To Date Wall Street Expectations For AMD Earnings, Revenue In Q3 2024 Wall Street anticipates AMD to report adjusted earnings per share (EPS) of 92 cents for the third quarter of 2024, reflecting a robust 31% increase from 70 cents in the same quarter last year, as per Benzinga Pro data. GAAP revenue is projected to reach $6.71 billion, a 16% year-over-year increase from $5.8 billion in the third quarter of 2023. A Positive Track Records Of Earnings Beats, Yet With Mixed Stock Reactions Over the last eight quarters, AMD has consistently, yet marginally, beaten EPS expectations in seven out of eight reports, with the only miss occurring in the third quarter of 2022 (-1.47%). Revenue has also largely exceeded expectations, with positive surprises in seven quarters, the largest being a 7.31% beat in Q1 2024. However, the stock's one-day price reaction has been mixed, demonstrating significant volatility. While strong quarterly beats drove substantial gains in the third quarter of 2023 (+9.69%) and the fourth quarter of 2022 (+12.63%), other quarters saw sharp declines despite solid results, such as the first quarter of 2024, where the stock dropped 8.91% following both a strong EPS beat of 8.77% and a 7.31% revenue surprise. Strong positive stock reactions occurred in the third quarter of 2023 (+9.69%) and the fourth quarter of 2022 (+12.63%). Negative reactions were recorded in the first quarter 2024 (-8.91%) and the first quarter of 2023 (-9.22%), despite substantial EPS and revenue beats, suggesting investor concerns about guidance-related issues Rosenblatt Securities: 60% Upside Potential With Server And GPU Gains Rosenblatt analyst Hans Mosesmann is optimistic about AMD's ability to meet and slightly exceed the Street's expectations. Mosesmann indicated that AMD's EPYC server CPUs and MI300 AI GPUs are on a positive trajectory, particularly in light of expanding market share in the high-performance computing space. However, he expects "slight growth" in embedded segments and double-digit declines in gaming consoles, which could act as a drag on AMD's overall performance. "We believe the shares are set to outperform the group after several quarters of skepticism around MI300's market share potential and mixed quarter results," Mosesmann said. Rosenblatt maintains a bullish 12-month price target of $250, implying a potential 60% upside from current levels. Goldman Sachs: Long-Term Optimism on AI Infrastructure and Server CPU Share Goldman Sachs analyst Toshiya Hari indicated that AMD has underperformed due to downward revisions in consensus EPS estimates for 2024, which have dropped 9% since the beginning of the year, while competitors like NVIDIA have seen significant upward EPS revisions. "We maintain our Buy rating on AMD given our expectation for sustained growth in AI infrastructure capex, a cyclical recovery in server CPUs, and continued market share gains in Enterprise," Hari said. He highlighted AMD's increasing x86 server CPU market share, which rose to 34% as of Q2 2024, from less than 20% in early 2022. Goldman Sachs estimates that AMD's upcoming next-generation server CPUs could further solidify its edge over Intel Corp. INTC in total cost of ownership (TCO) and efficiency. ETFs With Significant AMD Exposure Investors looking for indirect exposure to AMD's performance may consider ETFs heavily weighted in AMD. Below are the top 10 ETFs with the largest allocations in AMD shares: Read Next: ON Semiconductor Q3 Earnings: Revenue And EPS Beat Amid 19% Topline Drop and Margin Pressure, Eyes Growth in Automotive & AI Markets Photo: Shutterstock Market News and Data brought to you by Benzinga APIs

AMD Boosts Instinct GPU Sales Forecast Again Due To High AI Demand

AMD CEO Lisa Su says the $500 million upgrade in the company's Instinct GPU 2024 sales forecast was based on the completion of 'some important customer milestones' such as meeting reliability requirements in data centers and optimizing the chips on certain AI workloads. AMD said it now expects to make more than $5 billion from sales of its Instinct data center GPUs this year due to high demand from hyperscalers like Meta and Microsoft as well as other customers using the chips to run AI workloads. This marks an upgrade from the $4.5 billion AMD forecast for Instinct GPU sales in July and the $4 billion guidance it issued in April as the Santa Clara, Calif.-based chip designer seeks to challenge Nvidia, which saw revenue more than double year-over-year to $30 billion in the last quarter alone, largely due to its continuing dominance of the AI computing market. [Related: AMD Says Instinct MI325X Bests Nvidia H200, Vows Huge Uplift With MI350] AMD disclosed the sales momentum for its Instinct GPUs during the Tuesday call for its third-quarter earnings, where the company's CEO, Lisa Su, said "significantly higher data center and client processor sales more than offset declined in gaming and embedded product sales." As a result, AMD's third-quarter revenue came in at $6.8 billion, which was 18 percent higher than the same period last year and 17 percent higher sequentially. The company's gross margin grew 3 points year-over-year to 50 percent and its gross profit increased 24 percent year-over-year to $3.4 million while its earnings per share was up 161 percent to 47 cents. It expects to make roughly $7.5 billion in revenue for the fourth quarter, which would amount to a roughly 22 percent year-over-year increase and a 10 percent sequential increase. "This is an incredibly exciting time for AMD as the breadth of our technology and product portfolios, combined with our deep customer relationships and diversity of markets we address, provide us with a unique opportunity as we execute our next arc and make AMD the end-to-end AI leader," Su said on the earnings call. AMD's third-quarter revenue beat Wall Street's expectations by roughly $100 million while its adjusted earnings per share were slightly in line with analyst estimates. Its fourth-quarter revenue forecast fell just short of Wall Street's expectations, however. The company's stock price was down more than 7.5 percent in after-hours trading Tuesday. AMD said third-quarter data center revenue more than doubled from the same period a year ago, growing 122 percent year-over-year to a record $3.5 billion, thanks to a "strong ramp" of Instinct GPU shipments combined with growth of EPYC CPU sales. This was 25 percent higher revenue than the previous quarter, according to the company. Client revenue, on the other hand, grew 29 percent year-over-year and 26 percent sequentially to $1.9 billion, primarily thanks to "strong demand" for its Zen 5-based Ryzen processors. The chip designer suffered, however, when it came to its embedded revenue, which declined 25 percent year-over-year to $927 million due to customers working through existing inventory but increased 8 percent sequentially due to improving demand. It also saw gaming revenue sink 69 percent year-over-year and 29 percent sequentially, mainly due to lower semi-custom sales. Su said the $500 million upgrade in AMD's Instinct GPU 2024 sales forecast was based on the completion of "some important customer milestones" such as meeting reliability requirements in data centers and optimizing the chips on certain AI workloads. This allowed the company to ramp up Instinct shipments faster than previously expected. Two major customers that helped fuel sales in the third quarter were Microsoft and Meta, which both expanded their use of AMD's MI300X GPUs for internal workloads, according to Su. While Microsoft is using the MI300X to run multiple Copilot services powered by OpenAI's GPT-4 AI models, Meta has "broadly deployed MI300X to power their inferencing infrastructure at scale, including using MI300X exclusively to serve all live traffic for their most demanding Llama [405-billion-parameter] frontier model," she said. The company also saw the availability of MI300X public cloud instances expand among Microsoft, Oracle Cloud and smaller cloud providers while "multiple startups and industry leaders" such as Databricks and Essential AI drove "strong" adoption of such instances. Su said AMD has also received positive feedback from customers regarding its pending $4.9 billion acquisition of cloud computing specialist ZT Systems. The acquisition, which is set to close in the first quarter of next year, is expected to enable hyperscaler customers to "rapidly deploy AMD AI infrastructure at scale while giving server vendors "optimized board and module designs for a wide range of differentiated enterprise solutions," according to the CEO. At the same time, Su said, AMD's plan to divest ZT Systems' data center infrastructure manufacturing business has "received significant interest from a number of parties to-date." Looking out to the next two quarters, Su said AMD customer engagements around Instinct GPUs are "actually broadening quite well." "Our largest cloud customers are broadening the set of workloads that they're running on AMD instinct, and we're also very engaged with a number of large cloud and enterprise customers that are actively working with us and optimizing their workload," she said.

AMD gains as Northland says share gains likely to continue By Investing.com

Investing.com -- Shares of Advanced Micro Devices (AMD) (NASDAQ:AMD) rose on Monday during pre-market trading after analysts at Northland Capital Markets said that they believe that the company will report revenue at or above the high end of its guidance for the third quarter in a note dated Monday. "We expect AMD to continue to gain a share in server CPUs and AI accelerators in CY25. Slowing earnings growth will likely be OPEX as AMD invests billions of dollars to capture tens of billions of future annual revenue," the analysts said. The anticipated revenue increase is expected to boost AMD's bottom line, with non-GAAP earnings likely surpassing the consensus estimate of $0.92 per share. The analysts flagged AMD's ability to gain market share in the server CPU segment, a trend that has been bolstered by improvements in the enterprise market over the last three months. There are signs that demand for non-AI server products is also picking up, contributing to AMD's momentum in data center AI solutions. Northland expects AMD to guide for revenue above consensus for the fourth quarter, fueled by ongoing strength in its AI, server CPU, and client product lines. The analysts do not expect AMD to provide guidance for calendar year 2025 during the upcoming earnings report, which is anticipated in January 2025. However, they noted a sharp increase in AMD's revenue share in the server market, rising from just 2% in 2019 to 34% in the first half of 2024. This growth has been attributed to AMD's competitive product offerings, which continue to outperform those of its main rival, Intel (NASDAQ:INTC). Additionally, early performance benchmarks suggest that AMD will maintain its upward trajectory in market share with the next generation of server CPUs expected to launch in 2025. AMD's share in the AI accelerator market is also projected to grow, with estimates indicating an increase from 0.7% in 2023 to 3.9% in 2024. Analysts at Northland believe that AMD will continue to capture a larger slice of the accelerator market moving forward, especially as NVIDIA (NASDAQ:NVDA) faces delays with its Blackwell product family. The expected release of AMD's next-generation MI325x accelerators in early 2025 is expected to position the company well against NVIDIA's offerings, further solidifying its market presence. The shift toward AMD is partly driven by cloud service providers' (CSPs) desire for alternatives to NVIDIA, as indicated by year-over-year growth in AMD's AI revenue. Analysts at Northland estimate that AMD could potentially double its market share over the next two years, thanks to strategic partnerships with industry giants such as Google (NASDAQ:GOOGL), Oracle (NYSE:ORCL), Microsoft (NASDAQ:MSFT), Meta (NASDAQ:META), and Hugging Face. Beyond 2025, Northland's projections suggest that AMD could generate between $18 billion and $28 billion in AI revenue by 2027, representing 6.2% to 9.7% of the AI accelerator market. The total revenue for AMD in 2027 could range from $45 billion to $55 billion, contingent on steady growth in its other product lines. Analysts estimate potential earnings power of $6 to $9 per share by that time, although operating expenses remain a major variable in these projections. While there are concerns regarding AMD's necessary investments to catch up with NVIDIA, Northland asserts that the company's share gains against Intel demonstrate the long-term value of AMD's strategic investments.

AMD CEO Lisa Su: No 'One Size Fits All' In $500B AI Computing Future - Meta Platforms (NASDAQ:META)

Lisa Su, CEO of Advanced Micro Devices Inc. AMD, provided an optimistic outlook for the company's position in the burgeoning artificial intelligence market. What Happened: Su emphasized the potential for AI compute technology to evolve, in a recent interview with CNBC's Squawk on the Street, stating, "We really do believe that AI compute will enable the models to get even better, smarter...there is no one size fits all for compute." When asked about the changing landscape of AI, particularly regarding inference and the computing power required for various applications, Su acknowledged the complexities of the evolving technology. "As you are really going through multiple steps, I mean these models are amazing. We made excellent progress when you think about where we are today with some of the OpenAI models or some of the Llama models; they're great, but they can get better," she noted. Furthermore, Su shared an ambitious forecast regarding the total addressable market for data center AI, projecting it to reach $500 billion by 2028. This figure will encompass a variety of computing needs, including both training and inference processes. See Also: Trump's Billionaire Ally Plans To Join Elon Musk's DOGE If Named Treasury Secretary, Recommends Elimination Of These Subsidies Why It Matters: As AMD positions itself against major competitors like NVIDIA Corp (NASDAQ: NVDA), analysts are optimistic about the company's potential to capture market share in several sectors. This sentiment is supported by AMD's recent third-quarter results, which indicate a strong trajectory for its AI business. Meta Platforms Inc. META CEO Mark Zuckerberg recently revealed that Meta is developing its next-generation AI model, Llama 4, using an unprecedented computing infrastructure of over 100,000 Nvidia H100 GPUs. AMD's progress in the AI space has been acknowledged by industry experts, including CNBC's Jim Cramer, who believes that AMD will continue to see significant growth in the AI space, challenging Nvidia's dominance. Price Action: AMD's stock closed at $148.60 on Wednesday, down 10.62%, for the day. In after-hours trading, the stock fell further 0.98%. Despite the recent declines, AMD's stock has seen a year-to-date increase of 7.23%, according to data from Benzinga Pro. Read Next: Microsoft's AI Momentum Could Propel $4 Trillion Market Cap In 6-9 Months Amid 'Robust' Q1 Earnings, Says Dan Ives: 'This Is a Company Firing on All Cylinders' Image Via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs

AMD now expects to sell $5bn worth of GPUs in 2024

Q3 profits jump 191 percent from last quarter on revenues of $6.2 billion, helped by accelerated interest in Instinct AMD continued to ride a wave of demand for its Instinct MI300X AI accelerators - its answer to Nvidia's venerable H100 - in its third quarter, revealing that the part is expected to drive $5 billion in revenues during the chip designer's 2024 fiscal year. The revised figure is up $500 million from AMD's previous forecast and more than twice the $2 billion in annual revenues from the Instinct line that executives predicted this time last year. Speaking on AMD's third-quarter earnings call on Tuesday, CEO Lisa Su attributed the growth in Instinct adoption to the chip shop's overall strength during the quarter. In Q3 AMD raked in $771 million in net income on $6.8 billion in revenues - a year-over-year increase of 158 percent and 18 percent respectively. While Su didn't give specific numbers, she suggested that Instinct accelerator revenues were somewhere north of $1.5 billion during the third quarter. For comparison in Q2, AMD recorded more than $1 billion in Instinct sales. "We're actually seeing our GPU business really approaching the scale of our CPU business," she explained. This growth in MI300X shipments during the quarter was clearly reflected in AMD's datacenter revenues, which grew 25 percent compared to last quarter (122 percent year over year) to $3.5 billion. In fact AMD's datacenter division accounted for more than half its overall revenues during the quarter. Su expressed confidence AMD will win plenty more datacenter revenue in 2025. "There's still significant investment in trying to build out the infrastructure required," she told investors on the call. Su attributed some of this confidence to AMD's aggressive GPU roadmap. "Our product portfolio is getting stronger, with the annual cadence launching MI325 later this quarter and MI355 in the second half of next year," she noted. We explored the two parts in our launch day coverage earlier this month, but at a high level the MI325X is a memory bandwidth and capacity boosted version of the original MI300X, which should allow AMD to support larger models and deliver higher throughputs - particularly in inference workloads. The MI355X, which is due out in the second half of 2025, is a far larger upgrade, boasting up to 288GB of HBM3e and up to 9.2 dense petaFLOPS of either 4-bit or 6-bit floating point performance from its CNDA 4-based GPU dies. Another factor behind Su's confidence is growing customer familiarity with AMD's accelerators. The CEO drew comparisons to AMD's introduction of Epyc processors for servers back in 2017. "You remember our Epyc ramp from Zen 1, Zen 2, Zen 3, Zen 4. We had an extremely good product even back in the Rome days, but it does take time to ensure that there is trust built; there is familiarity with the product set." "Next year is going to be about expanding both customer sets as well as workload," she added. AMD is already seeing customers explore the MI300-series accelerators for training, in addition to its current role in inferencing workloads. "You heard Meta talking at our event about expanding from inference on their large language models with Llama 3.1 to some training workload," Su reminded listeners. However, Su warned that 2025 could be somewhat lumpy in the distribution of new Instinct sales. "It's not always predictable exactly which quarters you would expect the significant build out," she explained. Some of this may be down to high demand for datacenter space, facility infrastructure, and power required to support large scale deployments of AI accelerators in general. Alongside Epyc, Su also touted continued adoption for AMD's Epyc processor family - refreshed earlier this month - both by hyperscalers and enterprises, which she believes will help win additional share from rival Intel. AMD's Client division also saw strong gains during the quarter with revenues of $1.9 billion - up 26 percent from Q2 and 29 percent from the year ago quarter. Executives attributed much of this growth to strong demand for the newly launched Zen 5 desktop and mobile processors - the latter of which made their debut in late July. After a slight delay due to a mysterious quality control issue, AMD's Ryzen 9000-series processors followed a few weeks later. AMD will further expand the offering with a set of gaming-focused X3D versions of the chips in November. "HP and Lenovo are on track to more than triple the number of Ryzen AI pro platforms they offer in 2024," Su revealed of AMD's mobile platform. AMD also expects the end of Windows 10 support next year to drive spending among commercial PC buyers. AMD's embedded and gaming businesses continued to be a sore spot. In gaming, AMD raked in $462 million during the quarter - a whopping 69 percent down from this time last year. However, this was to be expected with much of the loss once again attributed to declining revenue for the semi-custom parts it creates to power consoles for Microsoft, Sony, and Valve. Embedded processor revenues - think AMD's Xilinx FPGAs and Versal Adaptive SoCs - were also down again in Q3, falling 25 percent for the year to $927 million. However, the market is showing signs of recovery - revenues rose eight percent from the prior quarter. In spite of this, executives believe the strength in the datacenter and client divisions will more than offset falling embedded and gaming revenues in Q4. For Q4, AMD is forecasting revenues of $7.5 billion plus or minus $300 million - an increase of 22 percent year over year and 10 percent sequentially. Investors weren't impressed with predictions of gentle growth. AMD shares fell into the $153 range in after hours trading after spending the day between $160 and $166. ®

Evercore ISI raises AMD stock PT to $198 on growth outlook By Investing.com

On Wednesday, Evercore ISI maintained its positive stance on Advanced Micro Devices, Inc. (NASDAQ:AMD), raising its price target to $198 from $193 while reiterating an Outperform rating. The firm's optimism is based on AMD's position as a leading supplier in the merchant accelerator market. AMD's shares experienced an 8% decline in aftermarket trading following its earnings report, which showed a third-quarter performance that met expectations but provided a fourth-quarter earnings per share outlook that fell 10% short of forecasts. Despite this, Evercore ISI encourages investment in AMD, citing the company's continued market share gains. The analyst highlighted AMD's successful strategy in the CPU market against competitors like Intel (NASDAQ:INTC), and now its focus on AI workloads with its MI300 solution. AMD reported $1.5 billion in sales for its MI300 solution in the third quarter and raised its 2024 revenue outlook to $5 billion, up from the previously projected $4.5 billion. Looking forward, the analyst expects AMD to benefit from further market share gains in server CPUs and growth in its client PC business. This forecast is supported by a new product cycle expected in the second half of 2025 and increased demand anticipated due to the end-of-life of Windows 10 in mid-2025. In other recent news, Advanced Micro Devices (AMD) has revised its revenue forecast upwards for its upcoming MI300 product, from over $4.5 billion to more than $5.0 billion. However, the company anticipates that the MI300 will initially have a dilutive effect on profit margins, impacting the stock valuation. Citi has adjusted its outlook on AMD shares, reducing the price target to $200 from the previous $210, citing reduced gaming margins and margin dilution from the MI300. Barclays (LON:BARC), while maintaining its Overweight rating on AMD, has reduced the price target from $180 to $170 due to potential headwinds in the client segment. In other recent developments, OpenAI has announced a collaboration with Broadcom (NASDAQ:AVGO) Inc. and Taiwan Semiconductor Manufacturing Company (TSMC) to create its inaugural in-house artificial intelligence chip, incorporating AMD chips to satisfy its growing infrastructure needs. This strategy aims to manage costs effectively. AMD has projected its fourth-quarter revenue to be slightly below market expectations, attributing the shortfall to supply chain constraints affecting its ability to fulfill the robust demand for AI chips. These recent developments highlight AMD's ongoing role in the rapidly evolving AI and semiconductor industries. Recent data from InvestingPro adds depth to Evercore ISI's bullish outlook on Advanced Micro Devices (AMD). Despite the post-earnings dip, AMD's market cap stands at an impressive $269.07 billion, reflecting its significant position in the semiconductor industry. The company's revenue for the last twelve months reached $23.28 billion, with a notable 8.88% quarterly growth in Q2 2024, aligning with the analyst's expectations of continued market share gains. InvestingPro Tips highlight AMD's strong performance, noting a significant 72.85% return over the past year and a robust 20.09% return in the last three months. These figures support Evercore's positive stance on the stock. Additionally, AMD's liquid assets exceeding short-term obligations suggest financial stability as the company pursues growth in AI workloads and server CPUs. It's worth noting that AMD is trading at a high P/E ratio of 198.13, indicating investor confidence in future growth prospects, particularly in areas like the MI300 solution mentioned in the article. For investors seeking a more comprehensive analysis, InvestingPro offers 16 additional tips on AMD, providing a deeper understanding of the company's financial health and market position.

AMD's Q3 2024 financial results - Data Center revenue up 122%, Gaming revenue down 69%

AI-Assisted TLDR: AMD's Q3 2024 financial results show an 18% year-over-year growth, driven by a 122% increase in Data Center segment revenue, thanks to strong sales of AMD Instinct GPUs and EPYC CPUs amid the AI boom. The Client segment saw a 29% growth due to Zen 5's launch.* Generated from the content by Kosta Andreadis below. AMD has reported its Q3 2024 or third quarter financial results, and as expected, Data Center segment revenue drove the overall year-over-year growth to 18% compared to Q3 2023. With $3.5 billion, AMD's Data Center segment revenue was up 122% compared to Q3 2023, thanks to strong AMD Instinct GPU and AMD EPYC CPU sales. Bolstered, of course, by the AI boom. "We delivered strong third quarter financial results with record revenue led by higher sales of EPYC and Instinct data center products and robust demand for our Ryzen PC processors," said AMD Chair and CEO Dr. Lisa Su. "Looking forward, we see significant growth opportunities across our data center, client and embedded businesses driven by the insatiable demand for more compute." Although the response to Zen 5 and the latest Ryzen 9000 Series has been mixed, AMD's Client segment revenue of $1.9 billion represents 29% year-over-year growth attributed to Zen 5's launch - another win. That said, it's a very different story regarding AMD's Gaming segment revenue. With only $462 million, AMD's Gaming segment revenue was down 69% year-over-year due to a "decrease in semi-custom revenue." This big drop reflects Radeon's continuing loss of market share in the PC space and lower-than-expected Xbox and PlayStation console sales. This figure also dropped AMD's operating income margin for its Gaming segment to a razor-thin 2%. On the plus side, AMD has RDNA 4 GPUs lined up, which could shake up the midrange market if they hit the right mix of price and performance. Also, the PlayStation 5 Pro will debut this month, which could increase console-related revenue. Of course, AMD's big revenue driver will continue to be its Data Center segment, led by new products like AMD EPYC 9005 Series processors and AMD Instinct MI325X accelerators. On the Client side, AMD has the highly anticipated Ryzen 9000 X3D chips waiting in the wings.

AMD Reports Third Quarter 2024 Financial Results, Revenue Goes Up 18 Percent YoY

AMD today announced revenue for the third quarter of 2024 of $6.8 billion, gross margin of 50%, operating income of $724 million, net income of $771 million and diluted earnings per share of $0.47. On a non-GAAP basis, gross margin was 54%, operating income was $1.7 billion, net income was $1.5 billion and diluted earnings per share was $0.92. "We delivered strong third quarter financial results with record revenue led by higher sales of EPYC and Instinct data center products and robust demand for our Ryzen PC processors," said AMD Chair and CEO Dr. Lisa Su. "Looking forward, we see significant growth opportunities across our data center, client and embedded businesses driven by the insatiable demand for more compute." "We are pleased with our execution in the third quarter, delivering strong year-over-year expansion in gross margin and earnings per share," said AMD EVP, CFO and Treasurer Jean Hu. "We are on-track to deliver record annual revenue for 2024 based on significant growth in our Data Center and Client segments." Segment Summary Record Data Center segment revenue of $3.5 billion was up 122% year-over-year and 25% sequentially primarily driven by the strong ramp of AMD Instinct GPU shipments and growth in AMD EPYC CPU sales. Client segment revenue was $1.9 billion, up 29% year-over-year and 26% sequentially primarily driven by strong demand for "Zen 5" AMD Ryzen processors. Gaming segment revenue was $462 million, down 69% year-over-year and 29% sequentially primarily due to a decrease in semi-custom revenue. Embedded segment revenue was $927 million, down 25% year-over-year as customers normalized their inventory levels. On a sequential basis, revenue increased 8% as demand improved in several end markets. Recent PR Highlights At the Advancing AI 2024 event this month, AMD and strategic partners including Dell, Google Cloud, HPE, Lenovo, Meta, Microsoft, Oracle Cloud Infrastructure, Supermicro and AI leaders Databricks, Essential AI, Fireworks AI, Luma AI and Reka AI unveiled a broad portfolio of solutions delivering enterprise AI at scale based on the latest AMD Instinct accelerators, EPYC CPUs, AMD networking solutions and Ryzen PRO CPUs:New AMD EPYC 9005 Series processors, with record-breaking performance and energy efficiency for diverse data center needs, available in a wide range of platforms from leading OEMs and ODMs. AMD Instinct MI325X accelerators, delivering leadership performance and memory capabilities for the most demanding AI workloads. AMD also shared new details on next-gen AMD Instinct accelerators planned to launch in 2025 and 2026. An expanded high performance networking portfolio to maximize performance, scalability and efficiency for AI systems, with the new AMD Pensando Salina DPU and AMD Pensando Pollara 400 NIC. New Ryzen AI PRO 300 Series mobile processors, powering next-gen AI PCs for the enterprise with 50+ AI TOPS and leadership performance, battery life, security and manageability features. AMD continues to extend leadership AI performance, optimizations and customer adoption for AMD Instinct accelerators and AMD ROCm open software:Oracle Cloud Infrastructure selected AMD Instinct MI300X accelerators with AMD ROCm open software to power its latest OCI Compute Supercluster designed for demanding AI workloads. AMD unveiled its first results on leading AI benchmark MLPerf, revealing excellent performance for AMD Instinct MI300X accelerators advanced by the AMD ROCm software platform, on-par with NVIDIA H100. AMD highlighted support for the latest Llama 3.2 release from Meta, enabling developers to build new agentic applications and personalized AI experiences on AMD accelerators and processors from cloud to edge and AI PCs. AMD and ecosystem partners are enabling new AI PC platforms and capabilities:In partnership with Microsoft, AMD announced that Copilot+ will be enabled on AMD CPU-powered AI PCs via a free upgrade planned to be available starting in November 2024. OEM partners including Acer, HP, Lenovo and ASUS announced new systems powered by AMD Ryzen AI 300 Series mobile processors, leveraging the leadership gaming, content creation and everyday performance of the new "Zen 5" architecture. AMD expanded its embedded portfolio for a range of applications, including:New AMD EPYC Embedded 8004 Series processors, designed to deliver outstanding performance and power efficiency for demanding workloads. The smaller form factor, cost-optimized AMD Alveo UL3422 Accelerator Card, a fintech accelerator for ultra-low latency electronic trading applications. The AMD Artix UltraScale+ XA AU7P, a cost-optimized, automotive-qualified FPGA for ADAS sensor applications and in-vehicle infotainment. AMD announced an agreement to acquire ZT Systems, a leading provider of AI and general purpose compute infrastructure for the world's largest hyperscale providers, to expand the company's data center AI systems capabilities and accelerate deployment of AMD AI rack scale systems with cloud and enterprise customers. The acquisition is subject to regulatory clearance and other customary closing conditions and is expected to close in the first half of 2025. AMD completed the acquisition of Silo AI to accelerate development and deployment of AI models on AMD hardware. AMD and Intel announced the creation of an x86 ecosystem advisory group with Broadcom, Dell, Google, HPE, HP, Lenovo, Meta, Microsoft, Oracle, Red Hat and industry luminaries Linus Torvalds and Tim Sweeney to collaborate on architectural interoperability and simplify software development. Current Outlook AMD's outlook statements are based on current expectations. The following statements are forward-looking and actual results could differ materially depending on market conditions and the factors set forth under "Cautionary Statement" below. For the fourth quarter of 2024, AMD expects revenue to be approximately $7.5 billion, plus or minus $300 million. At the mid-point of the revenue range, this represents year-over-year growth of approximately 22% and sequential growth of approximately 10%. Non-GAAP gross margin is expected to be approximately 54%.