Advanced Micro Devices AMD is expected to have benefited from strong Data Center revenues in the third quarter of 2024, set to be released on Oct. 29.
AMD benefits from a robust product portfolio and expanding partner base. It continues to strengthen its footprint in the enterprise data center arena by leveraging the power of fourth-generation EPYC CPUs.
AMD, along with its partners, continues to offer solutions that enable greater data center consolidation. AMD’s expanding portfolio, which now includes Instinct MI300 Series data center AI accelerators and the Alveo V80 accelerators in the embedded segment, has been noteworthy. Partners like Dell Technologies DELL, HPE, Lenovo and Supermicro all have the Instinct platforms in production.
The Zacks Consensus Estimate for Data Center revenues is pegged at $3.43 billion, indicating a year-over-year increase of 114.77%.
Advanced Micro Devices, Inc. Revenue (TTM)
Advanced Micro Devices, Inc. revenue-ttm | Advanced Micro Devices, Inc. Quote
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Click here to know how AMD’s overall third-quarter performance is likely to be.
Expanding Portfolio to Aid AMD’s Client Revenues
AMD’s expanding portfolio has been a key catalyst in driving the Client segment revenues.
AMD has expanded its mobile and desktop portfolio with the introduction of the new Ryzen AI 300 Series, the third generation of AMD AI-enabled mobile processors and Ryzen 9000 Series processors for laptop and desktop PCs.
AMD Ryzen AI 300 Series, with 50 tops of AI compute performance for Copilot Plus PCs, is the industry’s fastest NPU.
The consensus mark for third-quarter 2024 Client revenues is pegged at $1.798 billion, suggesting 46.18% year-over-year growth.
Sluggish PC Sales to Hurt AMD’s Top-Line Growth
AMD’s third-quarter top-line growth is expected to have been affected by a declining PC market.
Despite a recovering global economy, the PC segment witnessed a dip as worldwide shipments of traditional PCs dropped. Per IDC’s latest report, 68.8 million units were shipped globally during the third quarter of 2024, down 2.4% year over year.
Lenovo topped the shipment list, trailed by HP HPQ and Dell Technologies in terms of market share. Lenovo, HP, Dell, ASUS and Apple AAPL had 24%, 19.7%, 14.3%, 7.9% and 7.8%, respectively.
Moreover, in terms of shipment, Lenovo and HP witnessed growth of 3% and 0.4%, respectively, while Dell Technologies lost 4%. ASUS experienced 10% growth, the strongest on the list, while Apple witnessed a staggering decline of 24.2%, the biggest loser on the list.
What Should You Do With AMD Shares?
AMD is expected to have benefited from strong Data Center and Client revenues. However, weakness in the Embedded and Gaming segments is likely to have hurt top-line growth.
Sluggish PC sales have been creating headwinds for AMD, which currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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