AMD boosts AI chip sales forecast
The announcement saw AMD shares rise by 7.5% in extended trading. Despite the increased forecast, AMD’s CEO Lisa Su indicated that AI chip supplies would remain tight through 2025.
AMD has increased its 2024 forecast for AI chip sales by $500 million, anticipating continued tight supplies through 2025. The announcement sent shares of the California-based company up by 7.5% in extended trading. AMD’s AI chips, mainly purchased by cloud computing giants, are considered strong competitors to Nvidia’s dominant market presence. Following AMD’s report, Nvidia shares also rose by 4.7%.
CEO Lisa Su revealed that AMD’s AI chip revenue forecast 2024 is now $4.5 billion, up from the previous $4 billion target. In the second quarter, AMD’s data centre revenue, which includes AI chip sales, surged by 115% to $2.8 billion, surpassing estimates. For the first time, quarterly AI chip revenue exceeded $1 billion, highlighting the growing demand for these products.
Despite the significant investment in AI technology, substantial returns have yet to materialise. The outcome was evident as shares of Microsoft fell 6% due to missed growth targets in its cloud-computing services, suggesting that benefits from AI investments may take longer to materialise.
AMD’s revenue in the second quarter rose 9% to $5.8 billion, exceeding expectations. The company also forecasts third-quarter revenue of $6.7 billion, with a gross margin of about 53.5%. Additionally, AMD’s PC chip business is experiencing a recovery, reporting second-quarter revenue of $1.5 billion, driven by hopes that new AI features will boost consumer demand.
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