AMD stock soared as AI demand sees financials exceed expectations

Advanced Micro Devices (NASDAQ:AMD) stock soared in Tuesday’s ‘afterhours’ trade, thanks to second-quarter financial results that surpassed Wall Street expectations.

Revenue for the quarter came in at $5.83 billion, exceeding the consensus analyst forecast of $5.72 billion.

Earnings (adjusted) per share similarly beat expectations, albeit slightly, reported at $0.69 versus $0.68.

AMD highlighted significant growth in its Data Center segment, which saw a 115% year-over-year increase in revenue, rising to $2.8 billion, driven by strong sales of AI chips. The company said it sold over $1 billion worth of its MI300 chips sold in the quarter.

At the same time, AMD's Client segment also performed well, with revenue rising to $1.5 billion, up from $998 million in the same period last year, and, it also noted an ongoing recovery of the PC market.

AMD predicted third-quarter 2024 revenue to be approximately $6.7 billion.

Chief executive Dr Lisa Su highlighted the new company record for Data Center revenue, driven by AI-related demand.

“Our AI business continued accelerating and we are well positioned to deliver strong revenue growth in the second half of the year led by demand for Instinct, EPYC and Ryzen processors,” she said in a statement.

“The rapid advances in generative AI are driving demand for more compute in every market, creating significant growth opportunities as we deliver leadership AI solutions across our business.”

AMD stock gained $10.19 or 7.4% following the release of the results, in the afterhours session, with the chipmaker priced at $148.70.