Advanced Micro Devices said it expects third-quarter revenue near $13.0 billion, plus or minus $300 million, citing robust demand for chips that support the rapid expansion of data-center capacity used to power artificial intelligence. That guidance was ahead of analysts' forecasts, underscoring continued momentum in AMD's data-center business.
For the second quarter the company reported revenue of $11.54 billion, a 50% increase from a year earlier and above the estimate of $11.28 billion. Data-center revenue more than doubled to $6.72 billion, beating expectations of $6.48 billion. Adjusted earnings were $1.66 per share, compared with the consensus estimate of $1.62.
AMD said adjusted gross margin for the coming quarter is expected to be about 56%, largely in line with analysts' projections. The company has broadened its product approach beyond selling individual chips and is now offering integrated AI systems that combine processors, networking equipment and related hardware. Management framed that shift as a way to provide customers with a fuller, rack-scale infrastructure alternative to competing offerings.
While graphics processing units remain the dominant engines for heavy AI training workloads, AMD is also benefiting from rising demand for central processing units, which are used alongside high-end GPUs in servers. That CPU demand has supported AMD's effort to gain share from Intel in the server market.
AMD's supply chain is constrained, however, by its reliance on Taiwan Semiconductor Manufacturing Co. The company said tight advanced packaging capacity at TSMC remains a key bottleneck for production of its advanced products.
At an AI-focused event in July, AMD's chief executive said the company's second-generation Helios AI servers - which include the MI455X AI accelerator and the "Venice" processor manufactured by TSMC - are in full production and are scheduled to begin shipping in the coming months.
The third-quarter revenue outlook of about $13.0 billion, versus the LSEG-compiled analyst estimate of approximately $12.52 billion, suggests AMD's substantial investments to contest Nvidia's position in the AI chip market are beginning to drive faster sales of its data-center processors. The company views integrated systems and growing CPU demand as contributing factors to its performance, even as production capacity challenges at its foundry partner persist.
Financial snapshot - second quarter
- Revenue: $11.54 billion, up 50% year-over-year (estimate: $11.28 billion)
- Data-center revenue: $6.72 billion, more than doubled (estimate: $6.48 billion)
- Adjusted EPS: $1.66 (estimate: $1.62)
- Third-quarter revenue guidance: about $13.0 billion, plus or minus $300 million (analyst estimate: $12.52 billion)
- Expected adjusted gross margin: about 56%