AMD Q2 Net Profit Soars 881%, AI Sales Up to $4.5B!

On Tuesday, July 30th, after the U.S. stock market closed, AMD released its financial results for Q2 2024, ending June 29, 2024. The company reported revenue of $5.835 billion, marking a 9% year-over-year increase and a 7% quarter-over-quarter rise, surpassing analysts' expectations of $5.72 billion.

Under GAAP standards, AMD's gross margin was 49%, with an operating profit of $269 million and a net profit of $265 million—an impressive 881% increase year-over-year. Diluted earnings per share soared 700% to $0.16. Non-GAAP metrics showed a gross margin of 53%, an operating profit of $1.3 billion, a net profit of $1.1 billion, and diluted earnings per share of $0.69, exceeding the analyst forecast of $0.68.

Performance across AMD's divisions varied:

· Data Center Division: Achieved a record quarterly revenue of $2.834 billion, up 115% year-over-year, driven by strong sales of AMD Instinct GPUs and fourth-generation AMD EPYC CPUs. Revenue increased 21.3% sequentially, with a 405% year-over-year surge in operating profit to $743 million.

· Client Division: Generated $1.5 billion in revenue, a 49% increase year-over-year and a 9% increase quarter-over-quarter, largely due to rising sales of AMD Ryzen processors. Operating profit grew 3.5% sequentially to $89 million.

· Gaming Division: Revenue dropped 59% year-over-year to $648 million and fell 30% sequentially, primarily due to decreased semi-custom business revenue. Operating profit decreased by 65.8% year-over-year and 49.0% quarter-over-quarter to $77 million.

· Embedded Division: Revenue was $861 million, down 41% year-over-year but up 2% sequentially, as customers continued adjusting inventory levels. Operating profit fell 54.4% year-over-year but increased 0.9% sequentially to $345 million.

AMD’s Chair and CEO, Dr. Lisa Su, highlighted that sales of AMD's AI chips exceeded expectations, with the MI300 series alone generating over $1 billion in Q2 revenue. Su also revised the 2024 data center GPU sales forecast to exceed $4.5 billion, up from the previous estimate of $4 billion.

Looking ahead to Q3 2024, AMD expects revenue of approximately $6.7 billion, plus or minus $300 million, representing a 16% year-over-year increase and a 15% quarter-over-quarter growth, exceeding the analyst expectation of $6.61 billion. Non-GAAP gross margin is anticipated to be around 53.5%.

Following the strong Q2 performance and optimistic Q3 guidance, coupled with AMD's revised annual AI chip sales target, AMD's stock price surged 7.27% to $148.50 in after-hours trading.