AMD beats on Q1 revenue and EPS, stock edges lower on light guidance.
Chip giant AMD (AMD) reported its first-quarter earnings on Tuesday beating analysts’ expectations on the top and bottom lines, but lighter-than-anticipated guidance for the current quarter sent the stock lower.
Shares in the chipmaker were down about 6% in pre-market trading on Wednesday.
AMD’s announcement follows rival Intel’s disappointing report last week, in which it posted a lower-than-anticipated revenue outlook for the current quarter.
AMD said it expects Q2 revenue of between $5.4 billion and $6 billion; estimates called for $5.72 billion.
AMD reported adjusted earnings per share (EPS) of $0.62 on revenue of $5.5 billion. Wall Street was looking for adjusted EPS of $0.61 on revenue of $5.45 billion. The company reported EPS of $0.60 on revenue of $5.35 billion in the same quarter last year.
Importantly, AMD saw better-than-anticipated Data Center revenue in the quarter, with the company reporting sales of $2.34 billion. Wall Street was looking for $2.31 billion.
AMD’s MI300 chips are meant to go head-to-head with Nvidia’s (NVDA) bestselling H100 line of accelerators. The company previously said that its MI300X beats out Nvidia’s chips, a claim Nvidia rejected. Intel is also chasing Nvidia’s H100 platform with its Gaudi 3 accelerators.
Nvidia, however, announced its follow-up to the H100, the Blackwell platform, during its GTC conference in March. This platform should offer better performance than its predecessor.
The AI arms race isn’t slowing anytime soon, either. Microsoft (MSFT), Google (GOOG), and Meta (META) each announced that they’re pouring money into AI data centre capabilities to build out and support their various software offerings.
But whether AMD can steal significant market share away from market leader Nvidia remains to be seen. According to UBS Global Research analyst Timothy Arcuri, MI300X sales should bring in billions this year.
“We still very much see $5 billion to $6 billion as still conservative for MI300 revenue this year and we also see guidance being fine,” he wrote in an investor note ahead of earnings.
On the PC side, AMD reported Client revenue of $1.37 billion, ahead of Wall Street’s estimates of $1.29 billion.
According to IDC, global PC shipments grew 1.5% in the first quarter of 2024, marking the first quarter of growth after two years of declines. Intel, for its part, reported a 31% year-over-year bump in Client Group revenue, the company’s PC chip segment, in its latest quarter.
But AMD and Intel aren’t the only companies pushing for a slice of the AI PC market. Qualcomm (QCOM) is angling for its own cut with its new Snapdragon X Elite and Snapdragon X Plus chips for laptops.
Gaming and Embedded revenue, meanwhile, fell short of Wall Street’s expectations. AMD reported gaming sales of $922 million in the quarter, shy of the $965.5 million analysts had anticipated. Embedded revenue came in at $846 million. Analysts expected sales of $922.6 million.