AMD expects AI chip revenue to increase by $500 million in 2025
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AMD has updated its 2024 forecast for its sales and how it thinks the AI market is trending as reported by Reuters. Clearly, the AI needs are still keeping high as it stated that its artificial intelligence chip sales will increase by $500 million. But that doesn’t come easily, as it has also been said that the supply of these will remain tight right through 2025. So we see that it’s doing quite well in selling the CPUs focused on AI as after this announcement its shares also rose by 7.5%.
But that doesn’t exclude its competition, as in the AI market, Nvidia processors are still leading and its own shares rose 4.7% following this AMD report. Both of them compete for sales to cloud computing companies as AMD boasts of getting Meta Platforms and Microsoft on board as clientele to its chips.
AMD’s growth and expectations
With the constant sales, Dr Lisa Su said the expected sales forecast has increased to $4.5 billion from $4 billion in 2025. In the second quarter of the year, the data center revenue, the biggest area of the company, increased by 115% to $2.8 billion already, and it was the first time the AI segment grew above $1 billion.
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In general, AMD forecasted revenue of $6.7 billion for the third quarter as its second-quarter total revenue rose by 9% to $5.8 billion. With the third quarter gross margin estimated to be around 53.5%.
This also comes just before the Ryzen 9000 series release date, which was delayed from the original 31st July date, but it still will not reach the levels of the AI sales as that’s on its own scale. But it has the potential to create another boost, that might contribute to the increase estimates for the Q3 earnings. It also has the expectation of the Radeon 8000 series to launch at the beginning of 2025 which might keep that momentum going through another year.
But clearly along with the rise in AI AMD has had great growth in general as its desktop processors have also been rising in popularity. Especially as Intel’s instability has certainly tarnished the competition and might be a perfect time to catch even more of the market.