AMD (NASDAQ:AMD) announced robust financial results for the second quarter of 2024 on Tuesday (July 30), highlighting increases in revenue and earnings primarily driven by its data center segment.
The company’s revenue for Q2 reached US$5.84 billion, marking a 9 percent year-on-year increase. Its gross margin came in at 49 percent, while its operating income rose sharply by 1,445 percent to hit US$269 million.
Net income for the quarter was reported at US$265 million, translating to diluted earnings per share of US$0.16.
On a non-GAAP basis, AMD’s performance was even stronger, with a gross margin of 53 percent, operating income of US$1.26 billion, net income of US$1.13 billion and diluted earnings per share of US$0.69.
Dr. Lisa Su, AMD’s chair and CEO, credited the company’s positive performance to record revenue in its data center segment and continued acceleration in its artificial intelligence (AI) business.
“Our AI business continued accelerating and we are well positioned to deliver strong revenue growth in the second half of the year led by demand for Instinct, EPYC and Ryzen processors,” she said in a press release.
“The rapid advances in generative AI are driving demand in every market, creating significant growth opportunities as we deliver leadership AI solutions across our business,’ Su added.
AMD’s data center segment reported record revenue of US$2.8 billion, a 115 percent year-on-year increase, mainly driven by a sharp rise in AMD Instinct GPU shipments and robust growth in 4th Gen AMD EPYC CPU sales.
Meanwhile, the client segment saw a 49 percent year-on-year increase in revenue, reaching US$1.5 billion. It was driven by strong sales of AMD Ryzen processors. Sequentially, this segment’s revenue grew by 9 percent.
In contrast, the gaming segment reported a revenue decline to US$648 million, down 59 percent year-on-year and 30 percent sequentially, mainly due to decreased semi-custom revenue. The embedded segment’s revenue dropped by 41 percent year-on-year to US$861 million, although it saw a 2 percent sequential increase.
During H1, AMD expanded its AI solutions portfolio with new CPUs, GPUs, NPUs and software offerings.
Key announcements include an expanded AMD Instinct accelerator roadmap, the unveiling of the new AMD Instinct MI325X accelerator and the introduction of AMD Ryzen AI 300 Series processors for AI PCs.
In light of the company’s positive performance and the expectation of increased chip sales, AMD has raised its expectations for Q3, projecting revenue of approximately US$6.7 billion, plus or minus US$300 million. That would represent year-on-year revenue growth of about 16 percent at the midpoint of the range.
AMD’s share price spiked when trading opened on Wednesday (July 31), rising as high as US$151.23.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.