Advanced Micro Devices (AMD) reported impressive financial results, with $7.66 billion in revenue for the fourth quarter of 2024, surpassing the anticipated $7.53 billion. The company also exceeded earnings expectations, posting an adjusted earnings per share of $1.09 compared to the expected $1.08. However, AMD's data center sales did not meet analysts' forecasts, marking a notable aspect of the report.
Despite the overall revenue beat, AMD's data center sales reached $3.86 billion, which was a 69% increase year-over-year but fell short of analysts' predictions of $4.14 billion. This discrepancy highlighted the challenges AMD faces in meeting market expectations in this rapidly growing sector. Nevertheless, the data center division's annual revenue saw a substantial 94% increase, reaching $12.6 billion.
AMD's performance across other segments showed varied results. The company's client revenue, encompassing chips for PCs and laptops, grew by 58% to $2.3 billion. In contrast, the embedded chips division experienced a decline, with sales dropping 13% year-over-year to $923 million.
The company projected a gross margin of approximately 54%, reflecting its ability to maintain profitability amidst fluctuating market conditions. AMD's net income stood at $482 million, translating to 29 cents per share, down from $667 million, or 41 cents per share, from the previous year.
Looking ahead, AMD anticipates $7.1 billion in sales for the first quarter of 2025, with a margin of plus or minus $300 million. The company expressed optimism about its future growth prospects, particularly in the data center AI sector.
"We believe this places AMD on a steep long-term growth trajectory, led by the rapid scaling of our data center AI franchise from more than $5 billion of revenue in 2024 to tens of billions of dollars of annual revenue over the coming years," said Lisa Su, CEO of AMD.
This positive outlook is further reinforced by AMD's successful Instinct GPUs for AI and EPYC CPUs, which have been pivotal in driving data center sales and competing with industry rivals like Intel.