Advanced Micro Devices Inc (NASDAQ:AMD, ETR:AMD) delivered better-than-expected financial results for the first quarter but the optimism was overshadowed by its weak guidance for the current quarter, sending shares of the chip maker lower afterhours.
For Q2, AMD guided revenue in the range of $5.4 billion to $6 billion, representing year-over-year growth of 6% at the midpoint of $5.7 billion, slightly below the Wall Street consensus of $5.72 billion.
AMD’s adjusted gross margin is expected to be approximately 53%.
For Q1, revenue of $5.5 billion was ahead of AMD’s guidance of $5.4 billion and Wall Street estimates of $5.42 billion.
It marked a 2% increase over the year-ago quarter but 11% drop sequentially from $6.2 billion in Q4.
Data Center revenue was a record $2.3 billion, up 80% year-over-year, attributed to growth in AMD Instinct GPUs and 4th Gen AMD EPYC CPUs.
Client revenue was up 85% from the year-ago quarter at $1.4 billion driven by AMD Ryzen 8000 Series processor sales.
On the other hand, gaming segment revenue fell 48% due to a decrease in semi-custom revenue and lower AMD Radeon GPU sales and embedded segment revenue fell 46% to $846 million as customers managed their inventory levels.
Adjusted earnings per share (EPS) was $0.62, ahead of estimates of $0.61.
“This is an incredibly exciting time for the industry as widespread deployment of AI is driving demand for significantly more compute across a broad range of markets,” AMD CEO Lisa Su commented.
“We are executing very well as we ramp our data center business and enable AI capabilities across our product portfolio.”
AMD shares traded down 3.4% at $153 shortly following the release of its earnings report.