AMD Beats Q1 Revenue, EPS, Shares Fall on Weak Guidance (Video)

Chip giant AMD ( AMD ) reported its first-quarter earnings on Tuesday, which topped analysts’ earnings and earnings expectations, but brighter-than-expected guidance for the current quarter sent shares lower.

Shares of the chipmaker fell more than 6% in early trading on Wednesday.

AMD’s announcement follows a disappointing report from rival Intel last week, in which it posted lower-than-expected revenue forecasts for the current quarter.

AMD said it expects second-quarter revenue of $5.4 billion to $6 billion; estimates were $5.72 billion.

AMD reported adjusted earnings per share (EPS) of $0.62 on revenue of $5.5 billion. Wall Street expected adjusted EPS of $0.61 on revenue of $5.45 billion. During the same quarter last year, the company saw EPS of $0.60 on revenue of $5.35 billion.

Importantly, AMD reported better-than-expected data center revenue this quarter, with the company reporting sales of $2.34 billion. Wall Street was hoping for $2.31 billion.

AMD’s MI300 chips are expected to compete with Nvidia’s (NVDA) best-selling H100 line of accelerators. The company previously claimed that its MI300X beats Nvidia chips, a claim Nvidia rejected. Intel is also chasing the Nvidia H100 platform with its Gaudi 3 accelerators.

However, Nvidia announced its H100 follow-up, the Blackwell platform, at the GTC conference in March. This platform should offer better performance than its predecessor.

The AI ​​arms race isn’t going to slow down anytime soon either. Microsoft (MSFT), Google (GOOG, GOOGL), and Meta (META) announced that they are investing money in AI data center capabilities to develop and support various software offerings.

Time will tell whether AMD will be able to steal significant market share from market leader Nvidia. MI300X sales are expected to generate billions of dollars this year, according to UBS Global Research analyst Timothy Arcuri.

“We continue to believe that $5 billion to $6 billion for MI300 this year is still conservative and see the outlook as strong,” he wrote in a note to investors before the results were announced.

On the PC side, AMD reported customer revenue of $1.37 billion, topping Wall Street estimates of $1.29 billion.

According to IDC, global PC shipments grew 1.5% in the first quarter of 2024, marking the first quarter of growth after two years of declines. For its part, Intel reported 31% year-over-year revenue growth in its Customer Group, PC chip segment, in the latest quarter.

But AMD and Intel aren’t the only companies looking to grab a piece of the AI ​​PC market. Qualcomm (QCOM) is looking for its own solution, introducing new Snapdragon X Elite and Snapdragon X Plus chips for laptops.

Meanwhile, gaming and embedded revenues fell short of Wall Street expectations. AMD reported game sales for the quarter of $922 million, which was less than analysts expected – $965.5 million. Embedded revenue was $846 million. Analysts expected sales of $922.6 million.

Email Daniel Howley at [email protected]. Follow him on Twitter at @DanielHowley.

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