(Times Of Update) — Shares of Advanced Micro Devices Inc. rose after the chipmaker gave an upbeat revenue forecast, noting that its new artificial intelligence processors are driving growth.
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Third-quarter revenue is expected to be about $6.7 billion, the company said Tuesday. Analysts had expected $6.62 billion, on average. Second-quarter results also beat expectations, and the company raised its forecast for AI accelerators, chips used to develop artificial intelligence models.
The outlook suggests AMD is making headway in its race to buy Nvidia Corp., which dominates the accelerator market. Nvidia has capitalized on surging demand to send its shares and stock price soaring over the past year, becoming the world’s most valuable chipmaker. Now AMD is looking to make inroads with its own line, called the MI300.
AMD Chief Executive Lisa Su said Tuesday that AMD expects to generate more than $4.5 billion in sales from its MI300 products this year. That’s more than the previous target of $4 billion, though analysts’ estimates had been closer to $5 billion. The growth reflects an effort to ramp up production, but supplies remain tight, she said.
Su downplayed concerns that the race to add AI infrastructure is slowing, saying customers are still eager to seize the opportunity.
“The general view on AI investment is: We need to invest, the potential of AI is so great,” she said on a conference call with analysts. “The investment cycle is going to continue to be strong.”
MI300 revenue surpassed $1 billion in the second quarter and the company has committed to rolling out new AI processors once a year, a key milestone.
“We have continued to accelerate our progress in AI,” Su said. Cloud and enterprise customers are adopting AMD’s Instinct MI300X products, she said. And demand is growing for its traditional personal computing and server businesses.
AMD’s second-quarter revenue rose 8.9 percent to $5.84 billion, beating expectations of $5.72 billion. Earnings per share rose to 69 cents, beating expectations of 68 cents.
AMD is Nvidia’s closest rival in the accelerator market, but it remains largely behind. It aims to capture a larger share of the money that data center operators such as Microsoft Corp. and Meta Platforms Inc. are pouring into building AI tools.
While demand for accelerators is strong, appetite for some other AMD products has slowed. Embedded chips and semiconductors for game consoles have struggled recently.
AMD shares rose more than 7% in extended trading following the announcement. They had previously closed at $138.44 in New York, down 6.1% for the year.
AMD’s quarterly report kicks off a week of earnings updates from major semiconductor makers. Qualcomm Inc., Arm Holdings Plc and Intel Corp. are all reporting this week, and it comes at a delicate time for the chip industry. Investors have been…
