In a keynote address at the 2019 CES, Lisa Su, president and CEO of AMD, discussed the company’s EPYC processor. The company’s performance in the quarter ending in March exceeded LSEG consensus expectations, with earnings per share coming in at 62 cents adjusted versus the expected 61 cents, and revenue reaching $5.47 billion as opposed to the anticipated $5.46 billion.
AMD’s outlook for the current quarter includes an expected $5.7 billion in sales, representing a 6% annual growth, which is in line with Wall Street estimates. The company recorded net income of $123 million or 7 cents per share during this period, a significant improvement compared to a net loss of $139 million or 9 cents per share during the same period last year. Revenue was also up about 2% year-over-year.
One of AMD’s successful segments was its Data Center business which showed an impressive growth of 80% year-over-year to $2.3 billion, driven by sales of its MI300 AI chip which competes with Nvidia’s AI graphics processors. The company noted that it had sold over $1 billion worth of the AI chips since their launch in fourth-quarter 2023. Additionally, AMD’s client segment revenue reported $1.4 billion in first-quarter sales, marking an incredible increase of an astounding 85% annually from its original business of processors for chips and PCs.
However, AMD’s gaming segment was its weakest division declining by 48% annually to $922 million attributed to lower chip sales for game consoles and PCs due to market trends towards cloud gaming services like Google Stadia and Microsoft Xbox Game Pass service instead of traditional hardware platforms that are no longer appealing to gamers as much as before due to high costs and limited capabilities when compared with newer options available on these services. The company also noted a drop in sales in embedded segment which was acquired through Xilinx acquisition fell by 46% year-over-year to $846 million mainly due to older technology that can no longer compete against new innovations available on newer platforms today but still being used because they are cheaper alternatives for now until something better comes along or prices drop further than what is currently offered by competitors today.
AMD is emphasizing the ability of its chips to run artificial intelligence programs locally positioning them as potential drivers for new laptop and desktop sales as well as enabling more powerful localized AI solutions that can be implemented quickly and easily without relying on cloud services like Amazon Web Services or Microsoft Azure which may have higher costs and slower deployment times due to various factors such as network latency and data transfer rates