AMD Reports Strong Revenue Amid AI Chip Restrictions \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ AMD beat Wall Street expectations for Q1 2024, posting $7.44 billion in revenue and strong EPS. The chipmaker expects $7.4 billion in Q2 sales despite U.S. export restrictions on AI chips. CEO Lisa Su remains optimistic due to robust demand for data center and client chips.
Quick Looks
- Q1 earnings: $0.96/share adjusted vs. $0.94 expected.
- Q1 revenue: $7.44B vs. $7.13B expected, up 36% YoY.
- Q2 outlook: $7.4B revenue with 43% gross margin forecasted.
- AI export restrictions could cost $1.5B in FY2024 revenue.
- Data center revenue hit $3.7B, up 57% YoY on AI demand.
- Client and Gaming segment up 28% YoY; laptop chip revenue surged 68%.
- Gaming chip sales declined 30% YoY, mainly from console weakness.
- Embedded segment, including Xilinx, dropped 3% YoY to $823M.
- AMD CEO Lisa Su cites AI leadership and chip innovation as key strengths.
Deep Look
Advanced Micro Devices (AMD), one of the top global players in the semiconductor industry, delivered robust fiscal Q1 2024 earnings that beat analyst expectations despite navigating significant headwinds from tightened U.S. export controls on artificial intelligence (AI) chips. The company’s performance underscores its growing strength in AI hardware and continued momentum in data center and client computing segments, positioning it as a critical challenger in the fiercely competitive chip market.
For the quarter ending March 29, AMD reported adjusted earnings per share (EPS) of $0.96, exceeding the $0.94 expected by Wall Street analysts. Revenue reached $7.44 billion, beating consensus estimates of $7.13 billion and reflecting an impressive 36% increase year over year. Net income soared to $709 million (or $0.44 per diluted share), up significantly from $123 million (or $0.07 per share) in the same quarter a year prior.
This earnings beat comes at a critical time for AMD, as the company faces regulatory challenges stemming from U.S. government restrictions on AI chip exports—particularly to China. CEO Lisa Su addressed these restrictions during the company’s earnings call, revealing that AMD incurred $800 million in costs during Q1 as a direct result of the export controls. The company also projected $700 million in lost revenue in the second quarter and a total of $1.5 billion in losses related to AI chip export restrictions throughout fiscal 2024.
Despite these setbacks, AMD remains optimistic. For Q2, the company forecasted revenue of approximately $7.4 billion with a gross margin of 43%. These figures surpass Wall Street expectations, which called for $7.25 billion in revenue and EPS of $0.86. Su emphasized that the company’s diversified portfolio and strong demand for high-performance computing products, particularly in AI and data centers, are helping to mitigate the regulatory risks.
“While we face some headwinds from the dynamic macro and regulatory environments, including the recently announced export controls for Instinct MI308X shipments to China, we believe they are more than offset by the powerful tailwinds from our leadership product portfolio,” Su said.
A key contributor to AMD’s success this quarter was its Data Center segment, which generated $3.7 billion in revenue, up 57% from the prior year. This segment encompasses sales from Epyc processors and Instinct GPUs, both essential to training and deploying generative AI models in large-scale data centers. AMD confirmed that one major AI developer is currently using its chips to power inference tasks—the process of running trained AI models in real-world applications—highlighting the growing role of AMD hardware in cutting-edge AI deployments.
Additionally, AMD’s Client and Gaming segment reported $2.9 billion in revenue, a 28% year-over-year increase. This growth was largely fueled by the strong performance of AMD’s Zen 5 processors, released last summer, which helped drive a 68% year-over-year jump in laptop and PC chip sales. These results affirm the company’s resurgence in the consumer computing market, where AMD continues to challenge Intel’s dominance with efficient, high-performance CPUs.
However, not all areas of the business saw gains. The Gaming segment, specifically revenue from custom chips for gaming consoles, declined 30% year over year. AMD attributed this drop to cyclical demand patterns and a decline in orders from console manufacturers. Despite this weakness, the company remains committed to the gaming market and sees opportunity for renewed growth with next-generation consoles and cloud gaming infrastructure.
Meanwhile, AMD’s Embedded segment, which largely includes revenue from its 2022 acquisition of Xilinx, fell 3% year over year to $823 million. Though modest, this decline reflects a temporary dip in demand within the industrial, networking, and automotive sectors. AMD still views the embedded segment as a long-term growth driver, particularly as edge computing and FPGA applications expand.
In terms of market positioning, AMD continues to solidify its role as Intel’s closest competitor in server CPUs and Nvidia’s primary rival in high-performance GPUs for AI workloads. With $5 billion in AI GPU sales during fiscal 2024, AMD has made significant inroads into a segment once dominated by Nvidia. The company’s competitive pricing, open software ecosystem, and ongoing architecture advancements have made AMD a viable and increasingly preferred alternative in large-scale AI infrastructure projects.
Su also highlighted the macroeconomic environment during her remarks, noting that while uncertainties remain around tariffs and regulatory policies, investment in AI infrastructure continues at a strong pace globally. She said AMD is well-positioned to capitalize on this demand due to its innovative chip architecture and growing relationships with enterprise AI customers.
“The depth and breadth of our customer engagements continues to expand as breakthroughs in large-scale AI models like OpenAI’s 03 and DeepSeek R1 drive increased demand,” Su said. She confirmed that AMD chips are actively used in training and inference workflows—two critical stages of deploying large language models and generative AI services.
Looking ahead, AMD’s strategic roadmap includes a continued focus on AI, data center computing, and the integration of Xilinx’s adaptable computing platforms. The company plans to expand its presence in the AI ecosystem, increase production capacity, and accelerate software development to support AI frameworks and workloads.
In conclusion, AMD’s Q1 2024 results demonstrate a company that is not only surviving but thriving amid one of the most competitive and geopolitically sensitive environments in the global tech landscape. With strong financials, innovative products, and growing traction in AI, AMD is well-positioned for sustained growth—even as it navigates significant regulatory and market challenges.
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