AMD's data center revenue nearly doubles; shares surge 8% after hours

[Financial News]  

AMD shares surged more than 8% in after-hours trading on the 3rd (local time), after the company reported third-quarter results after the market closed that significantly beat market expectations. In particular, revenue in its data center segment, whose mainstay is AI chips, was found to have nearly doubled from a year earlier. Strong demand for AI semiconductors was reaffirmed.
AMD said it posted third-quarter revenue of $13.38 billion and adjusted earnings per share (EPS) of $2.09.
According to CNBC, Wall Street analysts surveyed by LSEG had forecast revenue of $13.09 billion and EPS of $1.95.
Revenue surged nearly 45% from $9.25 billion a year earlier.
CEO Lisa Su said data center segment revenue had nearly doubled, and expressed optimism that “the pace of growth will accelerate further going forward.” She also said she was confident that meeting demand would not be a problem.
In a statement, she said, “With our product portfolio leadership and deep customer and supply chain relationships, AMD will sustain very strong revenue growth and earnings expansion for years to come.”
Rival Intel had also reported results similar to AMD’s after the market closed on the 29th of last month, but its shares plunged 29% the following day. A pessimistic outlook that the company would struggle to meet demand led to the steep drop in its stock price.
AMD showed that AI chips had firmly established themselves as a core segment. The data center segment accounted for 64% of total revenue, up from 47% a year earlier.
However, the outlook for PC chips, another key area, was poor, much like Intel’s. Intel and AMD are the largest producers of x86 processors, which serve as the brains of many laptop computers and desktop PCs.
According to Counterpoint Research, the PC market is slowing. Global PC shipments fell 4% in the second quarter from a year earlier. That was because AI was absorbing memory chips and other components, sending prices for memory and other parts soaring.
AMD said revenue from PC chips fell 8% year over year, while gaming segment revenue plunged 40%.
AMD closed regular trading up $17.06 (3.65%) at $483.90, then surged $38.89 (8.04%) above its regular-session closing price in after-hours trading, reaching $522.79.

[email protected] Song Kyung-jae Reporter