AMD BEATS EARNINGS FORECASTS AS DATA CENTRE UNIT SURGES

Advanced Micro Devices reported second-quarter earnings on Tuesday that exceeded analyst expectations on both revenue and earnings per share. The chipmaker reported adjusted earnings per share of $1.66 against consensus forecasts of $1.62, and revenue of $11.54 billion versus expected $11.28 billion. AMD's stock declined more than 10 per cent in extended trading following the announcement, despite the results beating projections.

Data Centre sales drove the company's growth, reaching $6.7 billion and rising 107 per cent year-on-year, which AMD attributed to central processing unit and graphics processing unit sales. Overall company revenue climbed 50 per cent from $7.69 billion in the same quarter a year prior. AMD said the expansion reflected its position in the artificial intelligence chip market, with its Instinct-branded AI chips competing against rival Nvidia, and its Epyc-branded CPUs seeing renewed demand as AI experts identify them as essential for running agents. The company's stock has nearly tripled over the past year on optimism regarding its AI chip prospects.

AMD issued guidance of approximately $13 billion in revenue for the current quarter, within a range of plus or minus $300 million, exceeding LSEG consensus expectations of $12.52 billion. In July, AMD raised its estimates for the semiconductor industry's total addressable market, forecasting it could reach $2 trillion annually by 2028, with $1.4 trillion derived from AI accelerators, up from a previous projection of $500 billion by 2028. AMD will begin shipping Helios, its first rack AI system, this year to customers including Meta, OpenAI and Oracle.