The Santa Clara firm’s shares sank by about four per cent in after-hours trading as it reported just 14 per cent growth in data centre revenue, hitting $3.2 billion, which was broadly in line with analyst expectations. By comparison, rival Nvidia saw its own data centre figures balloon 73 per cent to $39.11 billion.
Chips for Microsoft, Meta, OpenAI and others remain white-hot property but AMD still can’t cash in on the scale of its competitors. While Meta and Microsoft are flinging money around, with the former hiking its annual capex forecast by $2 billion to between $66 billion and $72 billion and the latter expecting $30 billion in capex for its current quarter, AMD’s slice remains modest.
Carson Group chief market strategist Ryan Detrick said: “Investors may be paying closer attention to their data center segment as they roll out new products to compete with Nvidia and go after more reliable customers.”
AMD said AI chip revenue dropped year on year thanks to US export curbs to China and delays during the shift to its new MI350 series chips. Chief executive Lisa Su said AMD had kicked off volume production of MI350s ahead of schedule in June and expects output to ramp significantly in the second half of the year.
Synovus Trust portfolio manager Dan Morgan said the flat growth was “enough to raise an eyebrow as AMD trades off of data centre sales.”
The company expects third-quarter revenue to land around $8.7 billion, plus or minus $300 million, slightly ahead of the $8.3 billion analysts were expecting. Adjusted gross margins are expected to hit 54 per cent, which is basically flat.
That guidance does not include revenue from its MI308 chips to China since licence applications are still awaiting approval from the US Department of Commerce. The company had warned of a $1.5 billion hit to annual revenue from the China export curbs with the bulk falling across the second and third quarters.
Stripping out stock-based compensation and other bits of creative accounting, AMD posted a second-quarter profit of 48 cents per share on revenue of $7.69 billion.
