AMD reports better-than-expected results even as PC market shows continued weakness

AMD reported a gross diminution of 18% successful its fiscal second-quarter net report connected Tuesday, but inactive topped estimates for income and profit.

Here's however the institution did:

Earnings: 58 cents per share, adjusted, versus 57 cents per stock expected by Refinitiv statement estimates.Revenue: $5.36 cardinal versus $5.31 cardinal expected by Refinitiv statement estimates.

For the 3rd quarter, AMD said it expects $5.7 cardinal successful sales, portion analysts were looking for gross of $5.81 billion. The chipmaker said it expects its information halfway and embedded divisions to turn connected a fiscal twelvemonth basis.

"We are expecting a ample ramp successful the 2nd fractional for our Data Center business, weighted towards the 4th fourth and we are inactive looking astatine a ZIP codification — let's telephone it 50%, positive oregon minus, 2nd fractional to archetypal half," AMD CEO Lisa Su said connected a telephone with analysts.

The chipmaker reported nett income of $27 million, oregon 2 cents per share, down from $447 million, oregon 27 cents per share, successful the year-ago period. AMD excludes definite losses connected investments and acquisition-related costs from its earnings.

AMD's processor concern has slowed successful caller quarters, reflecting a heavy slump successful the planetary PC market. AMD's full gross dropped from $6.55 cardinal a twelvemonth ago, marking a 2nd consecutive 4th of declines.

But AMD is 1 of the fewer companies making high-end graphics processing units (GPUs) needed for artificial intelligence, and analysts are watching to spot if its server chips tin instrumentality marketplace stock distant from apical rival Intel. Last week, Intel posted a astonishment nett and reported income that were higher than expected.

Su said connected the telephone that the institution is expanding its AI-related probe and improvement spending, and has developed a strategy that includes AI-specific chips and bundle development.

"Our extremity is to marque this a important maturation operator for AMD," Su said.

AI could besides assistance PC spot sales, AMD said.

"Going forward, we spot AI arsenic a important PC request operator arsenic Microsoft and different ample bundle providers incorporated generative AI into their offerings," Su said.

AMD's lawsuit group, which includes income from PC processors, dropped a monolithic 54% twelvemonth implicit twelvemonth to $998 cardinal due to the fact that of a "weaker PC market," it said. AMD noted that marketplace conditions are improving.

"We expect our lawsuit conception volition turn successful the seasonally stronger 2nd fractional of the twelvemonth based connected the spot of our merchandise portfolio," Su said.

AMD's information halfway conception reported a diminution of 11% to $1.3 billion, which the institution said was owed to little server processor sales. Some unreality providers had other inventory during the quarter, the chipmaker said.

During the quarter, AMD announced a caller chip that's intended to physique and tally the benignant of AI models that are astatine the bosom of applications similar ChatGPT. AMD said the MI300X spot was presently being provided to customers for sampling and that accumulation would ramp successful the 4th quarter.

AMD sells less-powerful chips and networking parts successful its embedded segment, which was the lone assemblage of AMD to turn successful the period. The unit's gross jumped 16% to $1.5 billion.

AMD's gaming conception includes graphics processors for PCs arsenic good arsenic chips for consoles similar Sony's PlayStation 5. Sales successful the part dropped 4% connected an yearly ground to $1.6 billion, a diminution that could person been worse if not for precocious request for "semi-custom" chips similar the ones it makes for crippled consoles.

WATCH: AMD needs to present connected A.I. successful the adjacent fewer quarters