Advanced Micro Devices, Inc. (NASDAQ:AMD) stock fell 7.13% (As on August 2, 11:51:37 AM UTC-4, Source: Google Finance) after the company topped second-quarter estimates and touted inroads in artificial intelligence computing, putting it in closer competition with Nvidia Corp. Revenue at AMD’s PC chip unit was $998 million last quarter, topping the estimate of $840.9 million. Its gaming division generated $1.58 billion, just shy of the $1.62 billion projection. AMD’s data center business, meanwhile, has taken longer than expected to recover from a downturn. Its sales were $1.32 billion last quarter, short of the $1.4 billion average estimate. This is due to lower 3rd Gen EPYC processor sales as Enterprise demand was soft and Cloud inventory levels were elevated at some customers. Client segment revenue was $998 million, down 54% year-over-year due to reduced processor shipments resulting from a weaker PC market and a significant inventory correction across the PC supply chain. Embedded segment revenue was $1.5 billion, up 16% year-over-year primarily driven by strength in the Industrial, Vision and Healthcare, Automotive and Test and Emulation markets.
Meanwhile, the company’s AI engagements increased by more than seven times in the quarter as multiple customers initiated or expanded programs supporting future deployments of Instinct accelerators at scale. The company has made strong progress meeting key hardware and software milestones to address the growing customer pull for the data center AI solutions and are on-track to launch and ramp production of MI300 accelerators in the fourth quarter.
AMD in the second quarter of FY 23 has reported the adjusted earnings per share of 58 cents, beating the analysts’ estimates for the adjusted earnings per share of 57 cents. The company had reported 17.56 percent fall in the adjusted revenue growth to $5.36 billion in the second quarter of FY 23, beating the analysts’ estimates for revenue of $5.32 billion.
Third-quarter revenue is expected to be $5.4 billion to $6 billion, that is compared with an average analyst estimate of $5.84 billion. The midpoint of that range would represent a gain of about 2.5% from the same period a year earlier, marking the end of a two-quarter retreat.
For the third quarter, the company expects the Data Center and Client segment revenues to each grow by a double-digit percentage sequentially driven by increasing demand for the EPYC and Ryzen processors, partially offset by Gaming and Embedded segment declines.