Advanced Micro Devices (AMD) has reported better-than-expected first-quarter financial results and raised its forecast for artificial intelligence (A.I.) microchip sales this year to $4 billion U.S.
The microchip and semiconductor designer announced earnings per share (EPS) of $0.62 U.S. compared to $0.61 U.S. that was expected on Wall Street.
Revenue in Q1 totaled $5.47 billion U.S. versus $5.46 billion U.S. that was expected among analysts. Sales rose 2% from a year earlier.
AMD said revenue at its Data Centre unit grew 80% year over year to $2.3 billion U.S. due to robust sales of its latest MI300 series A.I. chips.
The company said it has sold more than $1 billion U.S. of the A.I. chips since they launched late in 2023.
AMD’s core business making processors for personal computers (PCs) reported $1.4 billion U.S. in Q1 sales, an 85% annual increase. The growth suggests the PC sales slump is over.
AMD’s weakest division during the quarter was its video game segment, which saw sales drop 48% year over year to $922 million U.S.
The company designs microchips for video game consoles such as the PlayStation, and demand has been weakening for several quarters.
As for guidance, AMD said it now expects $5.7 billion U.S. in sales for the current second quarter, in line with Wall Street estimates. That would represent about 6% annual growth.
AMD added that it foresees $4 billion U.S. in 2024 A.I. microchip sales, up from a previous estimate of $3.5 billion U.S. forecast in January of this year.
On an earnings call, management said that the company is working on new A.I. chips and successors to the current generation of processors, with more news on that front to come.
The stock of AMD is down 6% following the Q1 print as analysts and investors appear unhappy with the rate of growth at the company.
Before today (May 1), AMD stock had risen 77% over the last 12 months to trade at $158.38 U.S. per share.
