A360
Key Takeaways✦ Atlas AI
01
AMD forecasts Q2 revenue above estimates.
02
AI chip demand drives data center growth.
03
Competition and memory shortages pose challenges.
Atlas AI
Advanced Micro Devices (AMD) said Tuesday it expects second-quarter revenue to come in above Wall Street estimates, citing strong demand for its data-center chips as cloud companies increase spending on artificial intelligence infrastructure.
AMD forecast quarterly revenue of $11.2 billion, plus or minus $300 million, compared with analyst estimates of $10.52 billion. The company said its chips are being used for both AI model training and inference.
Data-center growth and margin outlook
AMD’s data-center segment revenue rose 57% year over year to $5.8 billion in the first quarter, ahead of analysts’ expectations of $5.64 billion.
For the second quarter, AMD projected adjusted gross margin of about 56%, above the 55.4% expected by analysts.
First-quarter results
For the first quarter, AMD reported adjusted earnings per share of $1.37 on revenue of $10.25 billion. Analysts had expected earnings of $1.29 per share on revenue of $9.89 billion.
Competition and supply constraints
AMD is facing intensifying competition from Intel, which is expanding its in-house manufacturing capacity for CPUs.
The semiconductor industry is also dealing with a global shortage of high-bandwidth memory chips used in data centers, and rising memory prices could weigh on demand for consumer electronics.
AMD’s Client and Gaming segment, which includes consumer hardware, increased 23% year over year to $3.6 billion.
