Advanced Micro Devices matched Wall Street's earnings target for the second quarter on higher-than-expected sales. But AMD stock fell in Wednesday trades.
The fabless chipmaker late Tuesday said it earned an adjusted 48 cents a share on sales of $7.69 billion in the June quarter. Analysts polled by FactSet had expected AMD to earn 48 cents a share on sales of $7.41 billion. On a year-over-year basis, AMD earnings declined 30% while sales increased 32%.
AMD's second-quarter results were negatively impacted by the U.S. government's export control restrictions. Those rules kept AMD from selling its Instinct MI308 data center processors to China. The restrictions led to about $800 million in inventory and related charges in Q2.
For the current quarter, AMD predicted sales of $8.7 billion. Wall Street was modeling $8.32 billion for the third quarter. In the year-earlier period, AMD generated revenue of $6.82 billion.
"We delivered strong revenue growth in the second quarter led by record server and PC processor sales," Chief Executive Lisa Su said in a news release. "We are seeing robust demand across our computing and AI product portfolio and are well positioned to deliver significant growth in the second half of the year, driven by the ramp of our AMD Instinct MI350 series accelerators and ongoing Epyc and Ryzen processor share gains."
AMD competes with Intel in PC and server processors and Nvidia in graphics chips and AI accelerators.
AMD Stock Retreats After Report
On the stock market today, AMD stock shed 6.4% to close at 163.12.
In the second quarter, AMD's data center revenue rose 14% year over year to $3.2 billion. Analysts said investors likely wanted to see a stronger performance from the data center business.
AMD's PC chip revenue surged 67% to $2.5 billion, driven by strong demand for its latest "Zen 5" Ryzen desktop processors.
Gaming chip revenue jumped 73% to $1.1 billion, fueled by sales of AMD Radeon graphics processors and custom chips for consoles.
Elsewhere on Tuesday, Arteris stock jumped after the chip design and technology firm scored a contract from AMD. Arteris announced late Monday that AMD has licensed Arteris' FlexGen network-on-chip interconnect intellectual property for AMD's next generation of AI chiplet designs.
Arteris stock rose 37.6% to close at 13 on Tuesday. But on Wednesday, Arteris stock came back to earth after its generally in-line quarterly report. On Wednesday, it sank 24% to close at 9.89.
Other Chip Stocks On The Move
Other semiconductor stocks moving on news this week include GlobalFoundries, Lattice Semiconductor, ON Semiconductor, Silicon Labs and Tower Semiconductor.
Lattice stock jumped after it reported in-line second-quarter results but gave a better-than-expected Q3 outlook. Its results also got a boost from content in AI servers and networking gear.
ON Semiconductor stock tumbled after it provided guidance modestly below buy-side whisper numbers amid a tepid recovery in the industrial and automotive markets.
GlobalFoundries and Silicon Labs fell after disappointing with their June-quarter reports. Tower Semiconductor rose on better-than-expected Q2 earnings.
AMD stock is on two IBD lists: Big Cap 20 and Tech Leaders.
Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
