By Max A. Cherney and Chavi Mehta
(Reuters) – Advanced Micro Devices on Tuesday forecast a strong fourth quarter and expects to have artificial intelligence hardware that can challenge Nvidia chips by that quarter.
Shares were up nearly 5% in after-hours trading.
“Our AI engagements increased by more than seven times in the quarter as multiple customers initiated or expanded programs supporting future deployments of Instinct accelerators at scale,” said AMD CEO Lisa Su.
Large cloud players like Microsoft and Google plan to ramp up spending on data centers in the second half of the year and that spending will skew toward AI chips and infrastructure, analysts said.
While AMD has announced its own competitor to market-leader Nvidia’s AI chips, those would not hit the market until the fourth quarter this year.
However, PC shipments decline has moderated and demand has started showing signs of improvement.
“Looking to the third quarter, we expect our Data Center and Client segment revenues to each grow by a double-digit percentage sequentially driven by increasing demand for our EPYC and Ryzen processors, partially offset by Gaming and Embedded segment declines,” said AMD finance chief Jean Hu.
The company forecast current-quarter revenue of about $5.7 billion, plus or minus $300 million. Analysts polled by Refinitiv expect revenue of $5.82 billion.
(Reporting by Chavi Mehta in Bengaluru and Max A. Cherney in San Francisco; Editing by Arun Koyyur and Matthew Lewis)
