AMD Reports Strong Q4 2023 Results, Forecasts AI Processor Sales Surge

Advanced Micro Devices (AMD) has unveiled robust financial results for the fourth quarter of 2023, with revenues totaling $6.2 billion, a gross margin of 47 percent, operating income of $342 million and net income of $667 million.
AMD Ryzen 8040The full-year 2023 figures showcase revenue of $22.7 billion, a gross margin of 46 percent, operating income of $401 million, net income of $854 million, and diluted earnings per share of $0.53. On a non-GAAP basis, the gross margin reached 50 percent, with operating income at $4.9 billion, net income at $4.3 billion, and diluted earnings per share at $2.65.

AMD CEO Lisa Su highlighted the company’s strong finish in 2023, citing record quarterly sales in AMD Instinct GPU and EPYC CPU, along with increased AMD Ryzen processor sales. Dr. Su emphasized the accelerating demand for their high-performance data center products, particularly in the context of the transformative impact of AI on the computing market.

Jean Hu, EVP, CFO, and Treasurer of AMD, acknowledged the successful execution of the company’s strategy in 2023 despite a challenging demand environment. Hu highlighted year-over-year revenue growth in the Data Center and Embedded segments, coupled with the successful launch of the AMD Instinct MI300 GPUs.

Segment Summary:

Data Center Segment:

Q4 Revenue: $2.3 billion (up 38 percent)

Full-Year 2023 Revenue: $6.5 billion (up 7 percent)

Client Segment:

Q4 Revenue: $1.5 billion (up 62 percent)

Full-Year 2023 Revenue: $4.7 billion (down 25 percent)

Gaming Segment:

Q4 Revenue: $1.4 billion (down 17 percent)

Full-Year 2023 Revenue: $6.2 billion (down 9 percent)

Embedded Segment:

Q4 Revenue: $1.1 billion (down 24 percent)

Full-Year 2023 Revenue: $5.3 billion (up 17 percent)

Q4 2023 Targets:

Revenue: $5.4 billion, plus or minus $300 million

Data Center Segment: Flat, offsetting a seasonal decline in server sales with a strong Data Center GPU ramp

Client, Embedded, and Gaming Segment Sales: Expected to decline sequentially, with a significant double-digit percentage decline in semi-custom revenue

AMD has revised its 2024 forecast for AI processors by an additional $1.5 billion. Lisa Su has mentioned the potential for exceeding the forecasted $3.5 billion worth of AI chips once additional capacity comes online in the second half of the year.

While the data center segment experienced a 38 percent growth to $2.3 billion, demand from cloud computing companies remained soft. AMD’s gaming segment contracted 17 percent to $1.4 billion, reflecting a peak in revenue from chips designed for Microsoft’s Xbox and Sony’s PlayStation 5.

As companies explore generative AI applications, the demand for AMD’s AI processors is expected to rise, providing a viable alternative to Nvidia’s dominant market share.

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