①AMD announced its third-quarter financial results, with earnings per share of $1.20, revenue of $9.25 billion, and net profit of $1.24 billion, all exceeding expectations; ②Although the results surpassed Wall Street's expectations, its margin guidance did not significantly exceed forecasts. Considering that the company’s stock price has surged 107% year-to-date, far outperforming the broader market, the stock declined in after-hours trading amid significant selling pressure.
Cailian Press, November 5 (Edited by Liu Rui) – After the close of trading on Tuesday Eastern Time, Advanced Micro Devices (AMD) released its third-quarter financial performance. The report showed that as AMD further expanded its artificial intelligence data center business and increased sales of PC processors, the company’s profits and revenues for the latest quarter grew substantially.
However, although this quarterly report exceeded Wall Street's expectations, considering that the company's stock price has surged 107% year-to-date, far outperforming the broader market, selling pressure cannot be ignored. Coupled with the broader U.S. stock market's concerns over high valuations of AI tech stocks on Tuesday, the company’s shares fell in after-hours trading.
The company's stock fell more than 3.7% in after-hours trading.
This situation closely mirrored the performance of Palantir, a leading AI application stock, just one day prior. Despite the company reporting comprehensive better-than-expected financial results on Monday and raising its guidance, it still closed down 7.94% on Tuesday.
AMD announces passing-grade financial results.
Compared to the consensus analyst data compiled by LSEG, the company’s performance for the third quarter ending September 27 is as follows:
Earnings per share: Adjusted at $1.20, expected at $1.16.
Revenue: $9.25 billion, an increase of 36% year-over-year, expected at $8.74 billion.
Net profit rose to $1.24 billion, or 75 cents per share, compared to $771 million, or 47 cents per share, in the same period last year.
By segment,
AMD's data center business (including standard CPUs and GPUs for artificial intelligence) generated revenue of $4.34 billion in the third quarter of this fiscal year, representing a 22% increase year-over-year. Analysts had previously forecasted revenue of $4.13 billion.
Revenue from the client segment (including PC processors) reached $2.75 billion, marking a 46% year-over-year growth and surpassing analyst expectations of $2.61 billion, setting a new record high.
Gaming segment revenue totaled $1.3 billion, reflecting a 181% year-over-year increase, compared to analysts' expectations of $1.05 billion.
For the fourth fiscal quarter, AMD anticipates revenue of approximately $9.6 billion, indicating a 25% year-over-year growth. This figure is slightly above LSEG's projected $9.15 billion. AMD expects the adjusted gross margin for the quarter to be 54.5%, consistent with analysts' forecasts of 54.5%.
The company noted that this guidance excludes revenue from shipments of its Instinct MI308 chips to China. Executives made a similar statement in the previous quarter.
Dr. Lisa Su, Chair and Chief Executive Officer of AMD, stated:
"Our outstanding performance this quarter, with both revenue and profitability reaching all-time highs, reflects robust demand for our high-performance EPYC and Ryzen processors as well as our Instinct AI accelerators. Our record-breaking results in the third quarter, coupled with strong expectations for the fourth quarter, signify a marked acceleration in our growth trajectory. With our computing business continuing to strengthen and our data center AI business growing rapidly, we are poised to drive significant revenue and profit growth."
AMD is collaborating with several tech giants
In recent months, AMD has been rapidly advancing, striving to catch up with NVIDIA in the AI processor market and break its dominant position. For years, OpenAI and other companies have relied on NVIDIA's GPUs to run large-scale artificial intelligence models.
Last month, AMD reached an agreement with OpenAI, under which the latter may acquire a 10% stake in AMD. The two companies stated that OpenAI will deploy 6 gigawatts of AMD Instinct graphics processing units across multiple hardware generations over the coming years, with the first deployment of 1 gigawatt of chips beginning in the second half of next year.
Also in October, Oracle announced plans to deploy 50,000 AMD Instinct MI450 artificial intelligence chips in its cloud services starting next year.
AMD Executive Vice President and Chief Financial Officer Jean Hu stated in the earnings report: 'Our continued investments in artificial intelligence and high-performance computing are driving significant growth and enabling AMD to create long-term value.'
