AMD Reports Record Revenue Driven by AI Demand

AMD has concluded the fiscal year 2024 with unprecedented revenue figures, marking a significant milestone in the company's history. The firm has reported a quarterly revenue exceeding $7 billion for the first time, reaching approximately $7.7 billion in the last quarter of 2024. This represents a 12% increase from the previous record quarter and a 24% rise compared to the fourth quarter of 2023.

Overall, AMD achieved a total revenue of $25.8 billion for the year 2024, which is over 9% higher than the revenue recorded in 2022 and 14% more than in 2023. This growth narrows the gap between AMD and Intel, whose revenue in 2024 was approximately twice that of AMD's. Notably, while Intel faced substantial losses amounting to $11.7 billion, AMD's operational profit surged by an impressive 374% to reach $1.9 billion.

In the fourth quarter alone, AMD reported a staggering increase of 155% in operational profit, totaling $871 million. In contrast, Intel experienced a steep 84% decline in its profits, dropping to $412 million. Furthermore, AMD's cash flow in the fourth quarter skyrocketed by 214% to $1.3 billion, contributing to a total cash flow increase of 82% for the year, amounting to $3 billion.

Despite a slight decrease in net profit compared to the previous year, AMD reported a net profit of $1.6 billion for 2024, reflecting a 92% increase. This drop is attributed to a significant rise in tax obligations, with the company paying $419 million in taxes in the last quarter of 2024, compared to $297 million in the same quarter of the previous year. Additionally, AMD has ramped up its investment in research and development, spending $1.7 billion in the fourth quarter alone, and increasing total expenditures for marketing and administration to $2.8 billion for the year.

The company's data center division has been a major contributor to this success, with revenue soaring by 94% to $12.6 billion, and operational profit nearly tripling to $3.5 billion. Lisa Su, CEO of AMD, provided specific figures for the Instinct graphics cards, which generated over $5 billion in revenue, bringing them close to accounting for 50% of the data center revenue. Major clients, including Meta, have significantly contributed to this surge in demand for AI-focused products like the Instinct MI300X and MI300A.

AMD's client segment, which includes all Ryzen processors for desktops and laptops, also experienced robust growth, with revenue increasing by 52% to $7.1 billion. After a minor operational loss in 2023, this segment rebounded to report a profit of $897 million in 2024.

Conversely, AMD's gaming and embedded divisions faced declines, primarily due to the waning product cycle. The gaming division, which includes Radeon graphics cards and console chips for systems like the PlayStation 5 and Xbox Series X/S, reported a 58% drop in revenue to $2.6 billion, with operational profit plummeting by 70% to $290 million. The embedded division, primarily comprising products from the acquired company Xilinx, saw its revenue decrease by one-third to $3.6 billion, with operational profit falling by 46% to $1.4 billion. Nevertheless, the overall company achieved a net annual margin of 49%, reflecting a 3 percentage point increase.

Looking ahead, AMD anticipates revenues of approximately $7.1 billion in the first quarter of 2025, which would represent a 30% growth compared to early 2024. However, the stock market reaction has been less favorable, with shares declining by over 8% in after-hours trading following the announcement of these results.