AMD forecasts quarterly revenue above estimates as data-center growth accelerates
· CNA · JoinRead a summary of this article on FAST.
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST Tap here to return to FAST
FAST
Nov 3 : AMD forecast fourth-quarter revenue above Wall Street estimates on Tuesday, buoyed by strong demand for its chips as its multibillion-dollar effort to challenge Nvidia's dominance of the AI semiconductor market gains momentum.
The company, which nearly doubled its data-center revenue in the third quarter, is benefiting as a shift in AI workloads toward running models in real-world applications drives demand for its graphics processing units and central processors.
This has enabled AMD to capture market share from rival Intel, which last week forecast quarterly revenue well below estimates and triggered a global selloff in chip stocks.
AMD expects fourth-quarter revenue of about $17 billion, plus or minus 3 per cent, above analysts' average estimate of $16.23 billion, according to data compiled by LSEG.
CNA Games
Guess Word
Crack the word, one row at a time
Buzzword
Create words using the given letters
Mini Sudoku
Tiny puzzle, mighty brain teaser
Mini Crossword
Small grid, big challenge
Word Search
Spot as many words as you can
Show More
Show Less
The company's adjusted gross margin is expected to be about 55 per cent, compared with estimates of 55.27 per cent and down from 56 per cent in the third quarter.
Shares of the company, which briefly entered the $1 trillion market capitalization club, have more than doubled so far this year.
AMD has stepped up AI product rollouts, moving beyond standalone chips to compete with Nvidia's rack-scale systems.
The company's flagship Helios rack, combining its MI455X accelerator and new "Venice" server chips, is in production and set for a larger ramp-up in the fourth quarter. The initial systems are being tested at Meta.
In February, the company agreed to sell up to $60 billion worth of AI chips to Meta over five years in a deal that allows the Facebook owner to purchase as much as 10 per cent of the chip firm.
AMD's third-quarter revenue rose 45 per cent to $13.38 billion, beating estimates of $13.09 billion. Data-center revenue jumped 97 per cent to a record $8.55 billion, exceeding estimates of $8.20 billion.
Adjusted profit came in at $2.09 per share, compared with estimates of $1.95.
The semiconductor industry is also grappling with a global memory shortage, leaving expensive high-bandwidth memory used in AI processors in scarce supply as manufacturers race to increase production.
Third-quarter sales in AMD's client and gaming segment, home to its PC chips and console processors, fell 8 per cent to $3.72 billion, missing estimates of $3.79 billion.
Beyond chips, AMD in September agreed to buy Fei-Fei Li's World Labs, a startup building AI that models 3D environments, for $8.2 billion in stock, gaining a foothold in research on physical AI systems.
Newsletter
Week in Review
Subscribe to our Chief Editor’s Week in Review
Our chief editor shares analysis and picks of the week's biggest news every Saturday.
Sign up for our newsletters
Get our pick of top stories and thought-provoking articles in your inbox
Get the CNA app
Stay updated with notifications for breaking news and our best stories
Get WhatsApp alerts
Join our channel for the top reads for the day on your preferred chat app