AMD says it will sell $4 billion in AI chips this year; stock drops on in-line forecast

Advanced Micro Devices reported first-quarter earnings and sales on Tuesday that were slightly ahead of Wall Street expectations, and provided an in-line forecast for the current quarter.

Shares dropped 7% in extended trading.

Here's how it did versus LSEG consensus expectations for the quarter ended in March:

AMD said it expects about $5.7 billion in sales in the current quarter, in line with Wall Street estimates of the same approximate total. That would represent about 6% annual growth.

The company reported net income of $123 million, or 7 cents per share, versus a net loss of $139 million, or 9 cents per share, during the year-earlier period. Revenue was up about 2% from a year earlier.

AMD shares have risen 14% in 2024, so despite meeting forecast estimates and signaling growth in AI chip sales, Tuesday's results were not enough to prevent the stock from sliding.

The chipmaker said its closely watched Data Center segment grew 80% year-over-year to $2.3 billion thanks to sales of its MI300 series AI chips, which compete with Nvidia's graphics processing units.

CEO Lisa Su said Microsoft, Meta, and Oracle use AMD's MI300X. AMD said it had sold over $1 billion of the chips since it launched in the fourth quarter of 2023.

AMD expects $4 billion in 2024 AI chip sales, up from a $3.5 billion forecast in January. For comparison, Nvidia, the biggest vendor of AI server chips, reported $18.4 billion in sales — mostly AI chips — in its data center segment alone for the January quarter, the most recent for which financial results are available.

Su told investors on Tuesday that the company was working on new AI chips and successors to the current generation. "We're getting much closer to our top AI customers. They're actually giving us