AMD studies sturdy progress in knowledge centre unit, however outlook according to expectations fails to impress traders
AMD reported doubled gross sales for its knowledge centre unit as demand rose for its AI chips, however the figures did not impress traders, who despatched its shares plummeting in after-hours buying and selling on Monday.
General revenues had been $6.82 billion (£5.24bn), beating analysts’ expectations of $6.71bn for the third quarter, however AMD’s income steerage was according to what analysts had predicted.
That wasn’t adequate for traders, who despatched AMD’s shares down 7 p.c in after-hours buying and selling.
The corporate’s shares had closed up practically 4 p.c, following a Reuters report that ChatGPT developer OpenAI has begun utilizing AMD AI chips alongside Nvidia GPUs by way of its Microsoft Azure cloud infrastructure.
AI progress
Microsoft and Oracle supply AMD’s MI300X AI chips for hire by way of their respective cloud companies.
AMD’s shares are up about 20 p.c thus far this 12 months, as traders wager that it will likely be one of many firms to profit from rollouts of AI companies.
Throughout an analyst name, AMD chief government Lisa Su mentioned Meta and Microsoft had been increasing their use of AMD chips, as firms search for Nvidia alternate options to extend range.
Nvidia controls greater than 80 p.c of the AI chip market, which it largely created, and it’s troublesome for firms to change to alternate options attributable to Nvidia’s entrenched ecosystem, which incorporates its CUDA software program and networking tools.
AMD raised its forecast for AI chip gross sales to $5bn this 12 months from a $4.5bn prediction in July.
AMD’s knowledge centre phase greater than doubled its gross sales year-on-year to $3.5bn in whole gross sales for the quarter, the corporate mentioned.
Su mentioned the MI325X AI chip, launched this month, ought to assist increase gross sales.
Desktop chips
“Buyer and accomplice curiosity for MI325X is excessive. Manufacturing shipments are deliberate to begin this quarter,” she mentioned.
AMD mentioned it expects about $7.5bn in gross sales for the fourth quarter, roughly according to expectations of $7.54bn, a 22 p.c year-on-year decline for the quarter.
The corporate is the second-biggest AI chip provider after Nvidia, however has had difficulties capitalising on elevated demand attributable to manufacturing constraints at contract chip maker TSMC, which have additionally affected Nvidia.
AMD’s consumer phase grew 23 p.c for the quarter to $1.19bn.
Through the quarter its chips had been included in laptops marketed by Microsoft as “Copilot+” techniques with built-in AI capabilities.
