AMD this week again reminded the world that Nvidia is not the only AI chips company blowing past revenue expectations. For the third quarter of 2024, AMD reported $6.8 billion in revenue, led by a third straight record sales performance in its Data Center and AI business, which posted $3.5 billion.
The overall company revenue mark represented an 18% year-over-year increase, while the Data Center and AI posting represented a whopping 122% year-over-year increase and 25% sequential improvement.
As has been the story throughout 2024, AMD’s Instinct GPU was the star of the show in the third quarter, as CEO Lisa Su noted that the large customers that have led the charge in adoption of AMD’s MI300X GPU continue to expand their use of the AI accelerator.
“Microsoft and Meta expanded their use of MI 300X accelerators [during the third quarter] to power their internal workloads,” Su said on the Q3 2024 earnings call. “Microsoft is now using the MI300X broadly for multiple components powering the family of ChatGPT4 models. Meta hase optimized and broadly improved and accelerated their inferencing infrastructure at scale, including using MI300X exclusively… most commanding Llama405b frontier [large language model].”
Su added, “We're also working closely with Meta to expand their Instinct deployments to other workloads where MI300X offers TCO [total cost of ownership] advantages, including for AI model training. Also, MI300x public cloud instance availability expanded in the quarter with Microsoft, Oracle Cloud, and multiple AI specialized cloud providers now offering instances with leadership performance and TCO advantages for many of the most widely used models.”
Meanwhile, Su said that the next members of the Instinct family remain on track for their scheduled debuts, with the shipments of the MI325X GPU expected to start this quarter, with widespread system availability from Dell, HPE, Lenovo, Supermicro and others starting in the first quarter of 2025. After that, the MI350X is on track to launch in the second half of 2025, with the MI400X currently on a path to roll out in 2026.
“We have built significant momentum across our data center AI business, with deployment increasing across and expanding to cloud, enterprise, and AI customers,” Su said. “As a result, we now expect our data center GPU revenue to exceed $5 billion in 2024.”
Su also repeated an expectation from earlier this year that AMD sees the potential for the total addressable market for data center AI accelerators to reach $500 billion by 2028, adding that this would be “roughly equivalent to annual sales for the entire semiconductor industry in 2023.”
While AMD is finally having some GPU success that should at least cause Nvidia to look over its shoulder, sales of AMD’s EPYC CPUs also were strong during Q3. “We believed we gained data center server CPU share in this quarter,” Su said.
Beyond the data center market, AMD also had Q3 success in the Client (PCs, etc.) segment, where it posted revenue of $1.9 billion, up 29% year-over-year and 26% sequentially, primarily driven by strong demand for the company’s Zen 5 CPu architecture and its Ryzen processors.
Elsewhere, AMD’s Embedded business was affected by customers continuing to “normalize” their inventory levels, a trend which resulted in a 25% year-over-year revenue decline to about $927 million. Still AMD CFO Jean Hu noted that on a sequential basis, Embedded revenue actually increased 8% as demand improved in several end markets.
AMD’s Gaming segment revenue also was down 69% year-over-year and 29% sequentially to $462 million, primarily due to a decrease in semi-custom revenue, the company said. However, this has been the story in the Gaming sector for a while for most chip providers.
The overall strong 2024 showing should carry straight through to the end of the year for AMD. For the fourth quarter of 2024, the company expects revenue to be approximately $7.5 billion, plus or minus $300 million. That figure would represent year-over-year growth of about 22% and sequential growth of about 10%, though Wall Street’s initial reaction to that outlook was negative, as AMD’s shares slid in after-hours trading by more than 7% after climbing by almost 7% in the hours leading up to the earnings report.