AMD beats on revenue, and earnings as overall sales rise 34% driven by AI

Advanced Micro Devices (AMD) announced its fourth-quarter earnings on Tuesday, revealing results that exceeded analyst forecasts along with a promising outlook for the upcoming quarter. Despite this positive news, the company's stock experienced a decline of up to 5% in after-hours trading. For the first quarter, AMD anticipates revenues of approximately $9.8 billion, with a margin of plus or minus $300 million, surpassing the market's expectations of $9.38 billion. The company's net income saw a significant increase, reaching $1.51 billion, equivalent to 92 cents per share, compared to $482 million or 29 cents per share from the same quarter last year. Overall, AMD's revenue grew by 34% year-on-year. While AMD is one of the few manufacturers of high-performance graphics processors for artificial intelligence, it still holds a modest share of the market, which is largely led by Nvidia. Recently, AMD has secured partnerships with major clients including OpenAI, the developer behind ChatGPT, and Oracle. The company is also set to launch its new integrated server-scale AI system, Helios, later this year. In terms of sales, the company's data center segment reported $5.4 billion, marking a 39% increase compared to the previous year. This growth was attributed to both AMD's central processors and its AI graphics processing units (GPUs). Additionally, the client and gaming segment grew by 37%, reaching $3.9 billion, driven by strong demand for Ryzen processors in laptops and PCs, which have gained traction against Intel. However, AMD's embedded segment saw a more modest increase of 3% year-over-year, totaling $950 million. The company has also navigated challenges regarding the shipment of its AI chips to China due to U.S. export regulations. Nonetheless, AMD reported $390 million in sales of its Instinct MI308 chips within China during the fourth quarter. In a statement, AMD CEO Lisa Su projected that the number of active AI users could exceed 5 billion in the next five years, highlighting the growing significance of AI in the tech landscape.