- AMD shares rose 8% intraday ahead of Q2 earnings, reflecting strong investor sentiment prior to the report.
- AMD reported revenue up 50% year over year, reaching $11.54 billion, exceeding expectations of $11.31 billion.
- Data Center sales doubled to $6.72 billion, marking a 107% increase year over year.
- AMD's sales outlook disappointed investors, leading to a stock decline after an AI-fueled rally, with shares falling more than 10% in after-hours trading.
- Third-quarter revenue is projected to be around $13 billion, plus or minus $300 million, which is below some analysts' expectations.
- Analysts had predicted revenue guidance as high as $14 billion, indicating that expectations were set high prior to the earnings report.
- AMD's Data Center segment is expected to continue its growth, with CEO Lisa Su stating that sales are projected to double by 2027.
AMD's revenue climbed 50% year-over-year to $11.54 billion, exceeding expectations, while Data Center sales doubled to $6.7 billion, a remarkable 107% increase. Despite this growth, shares fell 7.5% in after-hours trading due to a disappointing sales outlook for the next quarter, projected at $13 billion, below some analysts' estimates of up to $14 billion.23467
The company reported an adjusted EPS of $1.66, beating expectations of $1.61, and noted that its Data Center segment is driving growth, with operating income reaching $2.1 billion compared to a loss of $155 million a year ago. CEO Lisa Su stated, "Demand for both accelerators and CPUs is growing well above our prior expectations," and projected that Data Center sales will double by 2027.
Despite the strong performance, investors reacted negatively to the guidance, which fell short of the high expectations set by the market. AMD's stock is trading at 158x earnings, leaving little room for execution problems in the second half of the year. The company is also set to begin shipping its Helios AI system this quarter, which is expected to ramp up in the fourth quarter.
As AMD navigates this challenging landscape, the focus remains on the MI450 shipment cadence and the scale of commitments from major clients like Meta and OpenAI.
“AMD's data center revenue hit a record $6.72 billion, up 107% year over year, with operating income of $2.1 billion versus a $155 million loss a year earlier. The company guided third-quarter revenue to about $13 billion, below some Wall Street estimates as high as $14 billion.”
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