Santa Clara, California – AMD, a major player in the chip industry, released its first-quarter earnings on Tuesday, surpassing analysts’ expectations in both revenue and profits. However, the company’s projections for the upcoming quarter fell short of what was anticipated, leading to a decrease in stock value.
Following a disappointing report from rival Intel last week, where the company provided a lower-than-expected revenue outlook for the current quarter, AMD announced its revenue expectations for Q2. The company predicted revenue between $5.4 billion and $6 billion, slightly below the estimated $5.72 billion.
In the first quarter, AMD reported an adjusted earnings per share (EPS) of $0.62 on revenue of $5.5 billion, outperforming Wall Street’s estimated EPS of $0.61 on revenue of $5.45 billion. Moreover, the company’s Data Center revenue exceeded expectations, reaching $2.34 billion compared to the anticipated $2.31 billion.
AMD’s MI300 chips, designed to rival Nvidia’s popular H100 line, have sparked a competitive landscape in the industry. With Nvidia introducing its Blackwell platform to enhance performance, the AI arms race among tech giants like Microsoft, Google, and Meta continues to intensify.
While AMD aims to capture a significant portion of the AI PC market, challenges remain in overtaking market leader Nvidia. Analysts predict that AMD’s MI300X sales could generate billions this year, reflecting optimism for strong revenue performance in the coming months.
On the PC side, AMD reported Client revenue of $1.37 billion, surpassing Wall Street estimates of $1.29 billion. Meanwhile, both Gaming and Embedded revenue fell short of expectations, reflecting a mixed performance in different segments of the company.
As the tech industry witnesses rapid advancements in AI and chip technologies, competition in the market intensifies. Companies like Qualcomm are also vying for a share of the AI PC market with their new Snapdragon X Elite and Snapdragon X Plus chips for laptops, adding to the dynamic landscape of innovation and rivalry in the sector.