AMD (NASDAQ: AMD) announced impressive first-quarter 2024 results, reporting revenue of $5.5 billion, a gross margin of 47%, operating income of $36 million, and net income of $123 million. Dr. Lisa Su, AMD’s Chair and CEO, emphasized the company’s robust performance in data center and client segments, which grew over 80% year-on-year. The company saw this growth driven by the MI300 AI accelerator ramp-up and increased adoption of Ryzen and EPYC processors.
Dr. Lisa Su expressed enthusiasm for the industry’s current state, highlighting the increased demand for compute across various markets due to AI deployment. AMD, she noted, is well-positioned to capitalize on these opportunities as it expands its data center business and integrates AI capabilities across its product range.
Jean Hu, AMD’s EVP, CFO, and Treasurer, echoed this optimism, pointing out that the company’s data center segment revenue achieved a new quarterly record. She noted that AMD’s gross margin expansion was solid and that the company is well-placed to maintain revenue growth and margin improvement while investing in significant AI opportunities.
Segment Breakdown
Data Center – This segment generated a record $2.3 billion in revenue, marking an 80% year-over-year increase driven by growth in AMD Instinct GPUs and 4th Gen AMD EPYC CPUs. Revenue rose 2% sequentially due to the first full quarter of AMD Instinct GPU sales, despite a seasonal decline in server CPU sales.
Client – This segment brought in $1.4 billion in revenue, up 85% year-over-year, primarily due to sales of AMD Ryzen 8000 Series processors. Revenue fell 6% sequentially.
Gaming – Gaming segment revenue reached $922 million, reflecting a 48% year-over-year decrease and a 33% sequential drop, mainly due to a decline in semi-custom revenue and lower AMD Radeon GPU sales.
Embedded – The embedded segment recorded $846 million in revenue, a 46% year-over-year drop and a 20% sequential decline, reflecting inventory management by customers.
Recent Developments in AI, Cloud, and Data Centers
AMD has expanded its AI solutions for cloud, enterprise, and embedded markets, collaborating with companies like Lenovo, Dell Technologies, and Supermicro to introduce systems with AMD Instinct MI300X for AI workloads.
AMD’s AI software ecosystem has seen advancements with the AMD ROCm 6.1 software stack, offering new features and supporting generative AI tools.
The AMD Embedded+ architecture now integrates x86 embedded processors with adaptive SoCs, enhancing edge AI application development.
Leading industry partners are developing optimized solutions based on AMD’s processors. Lenovo, for instance, introduced two new platforms powered by 4th Gen AMD EPYC processors, designed for AI and mixed enterprise workloads.
AMD is also enhancing its software offerings for gamers, bringing AMD FidelityFX Super Resolution 3.1 and AMD Fluid Motion Frames for improved gaming experiences.
Current Prognosis
AMDanticipates that its revenue for the second quarter of 2024 will be approximately $5.7 billion, with a margin of error of roughly $300 million. At the middle of the revenue range, this represents growth of around 6% from the previous year to the current year, as well as growth of approximately 4% from one period to the next. It is anticipated that the gross margin for non-GAAP will be approximately 53%.
