AMD: Gaming weakens, servers and AI GPUs are booming

AMD's first quarter of the 2024 financial year also ended in April 2024, with the company increasing its revenue and profit by two and nine percent respectively compared to the same quarter of the previous year - AMD has therefore become more profitable. Both figures now stand at 5.47 and 2.6 billion respectively.

The figures were not well received on the stock market, although they were slightly above analysts' expectations. At times, the share price plummeted by 6.5 percent, having previously risen by a total of 7.4 percent in 2024, as Bloomberg reports. There are probably several reasons for this investor behavior, as AMD's figures are very mixed in detail.

For example, the data center chip segment, which is currently being watched particularly closely, was able to make significant gains: With sales of 2.3 billion US dollars, it set a new record according to AMD. In the company's data center division, the chip manufacturer is leading the way with Epyc CPUs and Instinct GPUs. The latter are in high demand due to the ongoing AI hype. According to AMD, the past quarter was the first reporting period in which the current GPU generation with the top model MI300 of the Instincts was continuously available.

Less sales with Radeons and console chips

As the first quarter is traditionally the weakest for chip manufacturers, a two percent increase in sales in the data center division represents a success. This also applies to client components such as Ryzen CPUs. AMD was able to achieve a turnover of 1.4 billion in this division, primarily thanks to the Ryzen 8000 APUs. After that, however, things take a turn for the worse: the gaming division slumped by 48 percent compared to the same quarter last year and only achieved a turnover of 922 million US dollars.

In its statement of financial position, AMD explicitly states that "fewer Radeon GPUs were sold" and that less revenue was generated with semi-custom chips. The latter refers to the company's division that produces SoCs for Playstation and Xbox. Due to the nature of this business, AMD does not even give an indication of unit sales, but the declining sales of the Playstation 5 due to the upcoming launch of the Playstation 5 Pro are likely to be a factor.

AMD nevertheless provides a positive outlook for the second quarter of 2024 with a revenue forecast of USD 5.7 billion. In the presentation (PDF) on the current figures, the next CPU generation with Zen 5 architecture is cited as one of the reasons for this. However, AMD only mentions "Strix Point" by name, which is the code name for new mobile Ryzens. "Granite Ridge", i.e. new desktop CPUs for the AM5 socket, is still expected to be announced at Computex in early June 2024 at the very least.

(nie)