AMD's second-quarter earnings exceeded expectations, driven by strong AI chip sales, leading to revenue growth.

Recently, after the U.S. stock market closed, American chip manufacturer AMD released a second-quarter earnings report that exceeded expectations.

The financial report shows that AMD's AI chip sales performed strongly, with the data center division's revenue increasing by about 100% year-on-year, setting a historical high, and growing more than 80% in the previous quarter. In the second quarter, the company's total revenue was $5.84 billion, up 9% year-on-year, exceeding the market expectation of $5.72 billion; net profit was $265 million, nearly eight times higher year-on-year.

The data center division has now become AMD's largest source of income, with second-quarter revenue reaching $2.8 billion, accounting for about half of the company's total revenue. The sales of the MI300X data center AI GPU drove this growth. AMD CEO Lisa Su revealed that AI chip sales were "higher than expected," with MI300 series chip revenue exceeding $1 billion this quarter. Based on this performance, Lisa Su raised the company's AI chip revenue forecast for this year from $4 billion to $4.5 billion, accounting for 15% of total sales. Due to the high demand for the MI300X, this situation is expected to continue until 2025.

As a major competitor to NVIDIA, AMD is favored by tech giants. Companies like Microsoft, Amazon AWS, and Oracle are purchasing AMD MI300 to gain AI computing power. Lisa Su mentioned that Microsoft is increasing its use of MI300 chips to support GPT-4 Turbo and multiple Copilot services. According to market research firm Omdia, Microsoft is also a major customer of NVIDIA, having purchased 150,000 H100 GPUs last year.

AMD is catching up with NVIDIA's pace. In June this year, the company launched the next-generation AI GPU Instinct MI325X, competing with the NVIDIA H200 GPU. The MI325X is 30% faster in computing speed and has twice the memory bandwidth of the H200. The H200 will be delivered from the third quarter, while the MI325X is scheduled to be released in the fourth quarter.

Apart from the AI business, AMD's client division also saw significant growth. Despite last year's slump in the consumer electronics market, the client division's second-quarter revenue reached $1.49 billion, up 49% year-on-year, with an increase in Ryzen CPU sales. However, the gaming and embedded businesses remained weak, with gaming division revenue falling by 59% and embedded division revenue dropping by 41%.

Looking ahead, AMD expects third-quarter 2024 revenue to reach $6.7 billion, plus or minus $300 million, in line with market expectations. After the earnings report was released, AMD's stock price rose by more than 7.7% in after-hours trading.

In summary, AMD's second-quarter 2024 earnings report exceeded market expectations, mainly due to strong growth in AI chip sales. The outstanding sales performance of the MI300X AI GPU significantly contributed to the company's financial growth. Looking forward, AMD expects to maintain stable revenue levels in the third quarter, with the market holding an optimistic view of its prospects. Overall, AMD is actively responding to competition through continuous innovation and strategic adjustments, solidifying its market position in the AI chip field.