AMD reports a significant increase in data center sales.

• Advanced Micro Devices reported second-quarter earnings on Tuesday.
• AMD aims to capture market share from its longstanding competitor Nvidia through its MI300X AI chip and demonstrate growth in its data center AI business, as desired by investors.
• The Data Center segment of AMD reported a 115% year-over-year increase in sales of AI chips, totaling $2.8 billion.

The company's AI chips sales showed continued growth and its second-quarter earnings beat Wall Street expectations for revenue on Tuesday.

AMD shares rose 6% in extended trading.

In the quarter ended June 29, AMD's performance exceeded LSEG's consensus expectations.

• Earnings per share: 69 cents adjusted versus 68 cents
• Revenue: $5.83 billion versus $5.72 billion expected

AMD anticipates $6.7 billion in sales this quarter, while analysts predict 93 cents in earnings per share on $6.61 billion in sales.

In the current fiscal year, the chipmaker's net income was $265 million, which amounts to 16 cents per share, compared to $27 million, or 2 cents per share, in the previous year.

Despite being the second-largest vendor of data center GPUs after Nvidia, AMD shares have declined by approximately 6% in 2024. In contrast, Nvidia's stock has more than doubled this year due to the increasing demand for AI GPUs, which are essential for training and deploying advanced AI models like ChatGPT. As a result, Nvidia has become the preferred chip choice for AI applications.

AMD aims to capture market share from its longstanding competitor Nvidia through its MI300X AI chip and demonstrate growth in its data center AI business. Previously, AMD predicted $4 billion in AI chip sales this year, which accounts for approximately 15% of the company's projected revenue.

The Data Center segment of AMD reported a 115% year-over-year increase in sales of its AI chips, Instinct GPUs, resulting in $2.8 billion in revenue, exceeding analysts' expectations of $2.75 billion.

The Client segment of AMD, which accounts for the company's core business, reported a 49% increase in sales for PCs year-over-year, exceeding expectations of $1.43 billion from Street Account. This growth indicates that the PC market is recovering from a decline caused by the pandemic.

AMD generates revenue from gaming consoles and GPUs for 3D graphics, which are included in the company's gaming category. Despite analysts predicting $676 million in sales, AMD reported $648 million in gaming revenue, a 59% decrease from the previous year.

In 2022, the company's embedded segment, consisting of products acquired through the Xilinx acquisition, reported $861 million in sales, a 41% decrease from the previous year, but exceeded Wall Street expectations of $856 million.