(AI) servers save AMD's butt while Radeon sinks
AMD has made significant gains in recent months. However, the gaming business with graphics cards and consoles is disastrous.
The Instinct MI300 accelerator series is now earning AMD more and more money.
(Image: AMD)
The AI server business is now also picking up speed at AMD. For a long time, Nvidia was the only representative among the major hardware manufacturers to earn a lot from the AI boom. In the second quarter of 2024, AMD set an internal record of 2.83 US dollars in server chip sales – 115 percent more than in the same period last year and 21 percent more than at the beginning of 2024. At 743 million dollars, the operating profit is also good by AMD standards.
According to AMD CEO Lisa Su, sales of the company's own Instinct accelerators have risen "steeply" – Models such as the Instinct MI300A and MI300X are also suitable for training AI models. The Epyc processors for servers are said to have grown "strongly".
Catastrophic gaming result
Despite the good figures from the data center group, total revenue only increased by nine percent – year-on-year, from 5.36 billion to 5.84 billion dollars. A net profit of 265 million dollars remains. The reason for the low overall growth is mainly the gaming division with the Radeon graphics cards and console processors, including those for Sony's Playstation 5 and Microsoft's Xbox Series X / S.
AMD's turnover from these chips amounted to only 648 million dollars, 59 percent less than in the previous year. With an operating profit of 77 million dollars, the division is only just keeping its head above water.
However, embedded hardware, especially FPGAs from the acquired company Xilinx, is not doing well either: turnover remains at a low level of 861 million dollars. A decent operating profit of 345 million dollars only remains thanks to the high margin.
(Image: AMD)
AMD sells more Ryzen CPUs
Meanwhile, client processors, i.e. all Ryzen CPUs for desktop PCs and notebooks, continue to grow. The division generated 1.49 billion dollars and landed just back in the black with an operating profit of 89 million dollars. A year earlier, turnover was just under one billion dollars, with an operating loss of 69 million dollars.
AMD is expecting record sales in the current third quarter, provided the company achieves the medium target of 6.7 billion dollars (+/- 300 million). The stock market is extremely pleased with the annual report – the share price rose abruptly by eleven percent after the announcement and has only fallen slightly since then.
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