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Advanced Micro Devices reported that revenue in its first quarter was $5.35 billion, down 9% from a year earlier as the client PC market slowed dramatically.
But Lisa Su, CEO of AMD, said in an analyst call that she believes growth will resume in the second half for PC and server markets.
“My view is enterprise will improve as we go into the second half and I see small signs that things are improving in China,” Su said. “We believe the client market is improving. Q1 was the bottom.”
She thinks client revenues are likely to be better in the second half of the year. In after-hours trading, AMD’s stock fell 5% to $84.93 a share.
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Analysts expected earnings per share to come in at 56 cents, and AMD beat those estimates with Q1 EPS of 60 cents. The $5.35 billion in quarterly revenue was also better than the $5.3 billion expected revenue.
AMD also said it expects about $5.3 billion in sales in the current quarter second quarter, compared to expectations of $5.48 billion. The net loss for Q1 was $139 million, or a loss of nine cents per share, versus net income of $786 million, or 56 cents a share, during the same quarter a year ago.
Among AMD’s divisions, the biggest decline was in AMD’s client group, which includes PC processor sales. AMD reported $739 million in sales for the client group, down 65% from $2.1 billion in sales a year ago. IDC reported that PC shipments dropped 30% in Q1.
For the data center, AMD sales grew slightly to $1.295 billion from $1.293 billion last year. The embedded segment, which includes networking chips, grew from $595 million last year to $1.56 billion, partially due more sales from the company’s purchase of Xilinx.
AMD’s gaming segment, which includes graphics processors for PCs as well as chips for consoles like the Playstation 5 and Xbox Series X/S, reported $1.76 billion in sales, down slightly from last year’s $1.88 billion mark. Last week, AMD’s rival Intel reported that overall sales dropped 36%.
Su said she believes demand is strong for AI processing chips and that AMD is well positioned with its architecture. She believes generative AI will drive the market forward, among other things. Su said that she doesn’t believe AMD lost share in the server chip market. In the second half, AMD will launch new server chips code-named Genoa and Bergamo.
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