Advanced Micro Devices late Tuesday edged above Wall Street's earnings target for the first quarter on better-than-expected sales. But AMD stock wavered in extended trading.
The Santa Clara, Calif.-based chipmaker earned an adjusted 96 cents a share on sales of $7.44 billion in the March quarter. Analysts polled by FactSet had expected earnings of 94 cents a share on sales of $7.12 billion. On a year-over-year basis, AMD earnings jumped 55% while sales increased 36%.
For the current quarter, AMD predicted sales of $7.4 billion. Wall Street was modeling $7.22 billion for the second quarter. In the year-earlier period, AMD generated revenue of $5.84 billion.
"We delivered an outstanding start to 2025 as year-over-year growth accelerated for the fourth consecutive quarter driven by strength in our core businesses and expanding data center and AI momentum," Chief Executive Lisa Su said in a news release.
"Despite the dynamic macro and regulatory environment, our first-quarter results and second-quarter outlook highlight the strength of our differentiated product portfolio and consistent execution positioning us well for strong growth in 2025," she said.
In after-hours trading on the stock market today, AMD stock initially rose but then pulled back. In recent trades, it was down more than 1% to 97.66. During the regular session, AMD stock slid 2% to close at 98.62.
Data Center Business Fuels Growth
In the first quarter, AMD's data center revenue surged 57% year over year to $3.7 billion. Sales of Epyc central processing units and Instinct graphics processing units fueled the growth.
AMD's PC chip revenue increased 68% to $2.3 billion, driven by strong demand for the company's latest Ryzen processors.
Meanwhile, sales declined in two smaller business segments: gaming and embedded chips.
In the second quarter, AMD expects to take a charge of $800 million for inventory related to new U.S. export restrictions that effectively barred the company from selling AI processors to China. It previously disclosed the charge in a regulatory filing on April 16.
With the one-time charge, AMD's adjusted earnings are estimated to be 47 cents a share in the second quarter, Truist Securities analyst William Stein said in a client note. That's below the consensus estimate of 88 cents. However, excluding the write-down, AMD's earnings guide would have been 90 cents a share, he said.
AMD competes with Intel in PC and server processors and Nvidia in graphics chips and AI accelerators.
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