AMD Reports Strong First Quarter Earnings Despite Weak Gaming, Surging Data Center and Client Revenue

During her keynote address at the 2019 CES in Las Vegas, Nevada, USA on January 9th, Lisa Su, the president and CEO of AMD, discussed the company’s successful performance in the quarter ending in March. The company exceeded LSEG consensus expectations with earnings per share coming in at 62 cents adjusted versus the expected 61 cents, and revenue reaching $5.47 billion as opposed to the anticipated $5.46 billion.

One of AMD’s strongest segments was the Data Center, which showed an impressive 80% growth year-over-year to $2.3 billion. This was driven by sales of its MI300 AI chip, which competes with Nvidia’s AI graphics processors. The company noted that it had sold over $1 billion worth of AI chips since their fourth-quarter 2023 launch. Additionally, AMD’s client segment revenue, their original business of processors for chips and PCs, reported $1.4 billion in first-quarter sales, marking an 85% annual increase.

However, AMD’s gaming segment was its weakest division, declining by 48% annually to $922 million. This was attributed to lower chip sales for game consoles and PCs. The company also noted a drop in sales in the embedded segment, acquired as part of the Xilinx acquisition in 2022, falling 46% year-over-year to $846 million.

AMD is emphasizing the ability of its chips to run artificial intelligence programs locally and positioning them to power “AI PCs,” which are seen as potential drivers of new laptop and desktop sales. The company is expected to provide updates on MI300 sales and other segments during an upcoming earnings call with analysts.