Advanced Micro Devices Reports Mixed Financial Results

Chipmaker Advanced Micro Devices (AMD) has reported mixed quarterly financial results, sending its stock down about 6% in after hours trading.

The Silicon Valley-based company announced earnings per share (EPS) of $0.48 U.S., which was slightly below the $0.49 U.S. expected on Wall Street.

Revenue of $7.69 billion U.S. came in above the consensus forecast of $7.42 billion U.S. Sales were up 32% from a year earlier.

AMD, as the company is known, is the second-largest maker of microchips and processors that power artificial intelligence (A.I.) applications behind rival Nvidia (NVDA).

During the quarter, AMD announced a new A.I. chip called the Instinct MI400 that is scheduled to hit the market next year.

However, AMD is also dealing with export controls on some of it’s A.I. chips because the U.S. government worries they could be used by adversaries for military purposes.

AMD’s adjusted gross margin during the quarter was 43%. The company said it would have been 54% if not for export controls.

The company also makes chips that compete with Intel (INTC) to power more traditional servers. Those processors had $3.2 billion U.S. in revenue during Q2, up 14% annually.

The other major segment for AMD is making microchips for laptop and desktop computers, as well as 3D gaming. That segment was up 69% on an annual basis to $3.6 billion U.S. in sales.

Gaming revenue alone was up 73% year-over-year to $1.1 billion U.S., said AMD.

Looking ahead, AMD said it expects sales of $8.7 billion U.S., plus or minus $300 million U.S., for the current quarter versus Wall Street expectations for earnings of $8.3 billion U.S.

AMD said its outlook doesn’t include any revenue from its new China-focused A.I. chip called the MI308.

The stock of AMD has risen 45% this year to trade at $174.31 U.S. per share.