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AMD CEO Lisa Su said the company expects its data-centre sales to more than double in 2027 and forecast total revenue growth above its more than 35% target. (EPA Images pic)<\/p>\nAMD CEO Lisa Su said the company expects its data-centre sales to more than double in 2027 and forecast total revenue growth above its more than 35% target. (EPA Images pic)<\/p>\n
SAN FRANCISCO: AMD\u00a0forecasts quarterly revenue above Wall Street estimates on Tuesday, banking on strong demand for its chips from massive data centre capacity expansions to power AI technologies.<\/p>\n
Yet, its shares fell nearly 9% in extended trading, suggesting that investors were looking for an even stronger outlook after the stock more than doubled this year spurred on by AI optimism.<\/p>\n
\u201cAMD is now in a similar position to Nvidia and the hyperscalers, where investors are looking for evidence that AI infrastructure investments will continue translating into accelerating returns,\u201d said Emarketer analyst Jacob Bourne.<\/p>\n
The Santa Clara, California-based company is regarded as chip giant Nvidia\u2019s closest rival in the market for graphics processing units, as major technology companies and governments worldwide ramp up spending on AI infrastructure.<\/p>\n
AMD expects third-quarter revenue of about US$13 billion, plus or minus US$300 million, while analysts estimate US$12.52 billion, according to data compiled by LSEG. Its expected adjusted gross margin is to be about 56%, largely in line with estimates.<\/p>\n
The company expects its data-centre sales to more than double in 2027, and forecast total revenue growth above its more than 35% target and annual earnings above its US$20-per-share goal set at its 2025 analyst day, CEO Lisa Su said on a post-earnings conference call.<\/p>\n
The forecast suggests that AMD\u2019s investments to challenge Nvidia\u2019s dominance in the market for AI chips are beginning to pay off, with sales of its data centre processors accelerating in the second quarter.<\/p>\n
AMD\u2019s quarterly data centre revenue more than doubled to US$6.72 billion, beating expectations of US$6.48 billion. It grew 16.3% sequentially from US$5.78 billion in the first quarter.<\/p>\n
Second-quarter revenue jumped 50% to US$11.54 billion, beating the estimate of US$11.28 billion. Adjusted profit of US$1.66 per share also surpassed the estimate of US$1.62.<\/p>\n
A broader AI hardware play<\/p>\n
AMD has stepped up its AI product launches and moved beyond selling individual chips to offering AI systems that combine processors, networking gear and related hardware, giving customers an integrated option.<\/p>\n
It also allows the company to better rival rack-scale products by Nvidia, which in March unveiled its\u00a0next-generation \u201cVera\u201d CPU\u00a0to pair with its \u201cRubin\u201d line of graphics processors.<\/p>\n
Su said AMD\u2019s 2027 rack-scale AI platform would bring together MI500 GPUs, Verano CPUs and Pensando networking in a system designed to support both copper and optical connectivity.<\/p>\n
AMD is also benefiting from growing demand for central processing units, which are used alongside pricey graphics processors in servers for inference \u2014 data crunching that occurs when a user queries a chatbot.<\/p>\n
This has helped it capture market share from Intel, which\u00a0raised its spending plans\u00a0for the next two years to capitalise on the demand boom.<\/p>\n
At AMD\u2019s AI event in July, Su had said the company\u2019s second-generation Helios AI servers, featuring the MI455X AI accelerator and \u201cVenice\u201d processor made by TSMC, were\u00a0in full production\u00a0and would begin shipping in the coming months.<\/p>\n
The company has also secured major customers and infrastructure agreements in recent months.<\/p>\n
In July, AMD agreed to sell Anthropic\u00a0tens of billions of dollars worth of AI servers\u00a0powered by up to 2 gigawatts of MI450 chips from early 2027, and invest up to US$5 billion in the\u00a0IPO-bound\u00a0Claude maker, contingent on deployment milestones.<\/p>\n
It locked in\u00a0up to 2.5 GW of data-centre capacity\u00a0through a deal with Core Scientific\u00a0a week ago, while gaining warrants to purchase the company\u2019s stock.<\/p>\n","protected":false},"excerpt":{"rendered":"AMD CEO Lisa Su said the company expects its data-centre sales to more than double in 2027 and…\n","protected":false},"author":2,"featured_media":161796,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[159],"tags":[8301,580,2667,35757,588,80678,692,47719,2581,39760],"class_list":["post-178321","post","type-post","status-publish","format-standard","has-post-thumbnail","category-lisa-su","tag-ai-chips","tag-ai-infrastructure","tag-amd","tag-amd-earnings","tag-data-centres","tag-graphics-processors","tag-lisa-su","tag-nvidia-rival","tag-semiconductor","tag-technology-stocks"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@people\/117040522581026410","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/posts\/178321","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/comments?post=178321"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/posts\/178321\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/media\/161796"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/media?parent=178321"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/categories?post=178321"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/tags?post=178321"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}