The Advanced Micro Devices, Inc. (NASDAQ: AMD) stock price edged 2.70% higher after releasing its Q2 2023 earnings results. The company revealed that its revenues fell 18% to $5.4 billion from the $6.6 billion recorded in a similar period last year.
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The computer chip manufacturer’s gross profits fell 19% to $2.4 billion from $3.0 billion in Q2 2022. However, the company’s gross margins remained flat at 46%, a decent figure for the computer chips industry. The company was expected to do much worse, which explains the increase in its share price.
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AMD noted that its data center revenues were down 11% year-over-year to $1.3 billion, primarily driven by lower sales of its third-generation EYPC processors. The company also noted that demand from enterprise customers was soft, while some customers had elevated cloud inventory levels.
The company’s segment revenue grew 2% as 4th Gen AMD EPYC™ CPU revenue nearly doubled, and EPYC CPU Enterprise sales increased. However, the higher revenues were partially offset by a decline in adaptive System-on-Chip (SoC) data center products.
AMD revealed that more than 670 AMD-powered cloud instances are now publicly available. Leading HPC, Cloud and AI customers are sampling the company’s AMD Instinct™ MI300A and MI300X GPUs. The company has pinned its hopes on the AI segment, where demand for its accelerators is growing.
The weaker PC market contributed to the client segment revenues falling 54% to $998 million compared to last year due to reduced processor shipments. Despite the decline, the company saw demand for its AMD Ryzen™ 7000 Series CPU processors, whose sales grew 35% as PC market conditions improved.
Dr Lisa Su, the AMD Chair and CEO, said: “We delivered strong results in the second quarter as 4th Gen EPYC and Ryzen 7000 processors ramped significantly. Our AI engagements increased by more than seven times in the quarter as multiple customers initiated or expanded programs supporting future deployments of Instinct accelerators at scale. We made strong progress meeting key hardware and software milestones to address the growing customer pull for our data center AI solutions and are on track to launch and ramp production of MI300 accelerators in the fourth quarter.”
AMD stock price.
The AMD stock price was trading up 2.70% at $120.78, rising from Tuesday’s closing price of $117.60.
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