By Wallace Witkowski
'We see a very strong second half of the year for our data-center business,' Su tells investors at Goldman Sachs conference
Advanced Micro Devices Inc. shares were gaining Tuesday after the chip maker's chief executive said high interest in the company's premier artificial-intelligence data-center chip has translated into sales.
At Goldman Sachs' Communacopia + Technology investor conference in San Francisco Tuesday, AMD (AMD) Chair and CEO Lisa Su said interest in the company's AI data-center hardware was even higher than she had reported a month ago, when it had been up seven times relative to the previous year in terms of customer engagements.
Shares of AMD, which had been trading at a slight loss on the session at around $109 toward the beginning of the call, rose as much as 2% to an intraday high of $111.45 and were last up less than 1% by the end of the presentation.
"Even since our last earnings call, over the past 30 days, what we've seen is a continued acceleration of those engagements, and a number of those engagements have turned into customer commitments, which we're really excited about," Su said, adding that she saw "a very strong second half of the year for our data-center business."
In AMD's most recent earnings report, in early August, data-center numbers declined from a year ago, but the company didn't have comparable AI chip sales in its results. Both Nvidia and AMD have launched new AI chips this year, Nvidia in March and AMD in July
Addressing concerns about the potential implications of geopolitical tensions and bans on the sale of some AI technology to China, Su said China could contribute some 20% to 25% of the company's revenue.
"We'll continue to invest in China because we think it's an important market," Su said.
Su, who has been with AMD since 2012, and became CEO in 2014, however, stressed that on her watch, the company had become a full package supplier to data centers.
"I think what makes AMD unique is we've actually spent the last 10 years putting together all of the computing pieces that you need," Su said, standing by her estimates of a $150 billion accelerator market by 2027.
Su noted data centers not only need central processing units, they also need graphics processing units, and "field-programable gate arrays," or chips that can be configured by a customer or a designer after they are made, and are used as accelerators in data centers to boost computing power and improve power efficiency in existing physical spaces. a big chunk of the data-center puzzle AMD acquired in its acquisition of Xilinx last year.
"You need AI accelerators," Su said. "You need the software capability around that. And that's really the portfolio that we have."
In its late August earnings, Nvidia blew past Wall Street estimates for data-center sales by more than $2 billion and offered a third-quarter revenue outlook of more than $3 billion, following the launch of a new generation of AI data-center chips.
See also: Nvidia 'should have at least 90%' of AI chip market, with AMD on its heels
AMD shares are up more than 70% year to date, while Nvidia shares are up more than 230%, compared with a 46% surge in the PHLX Semiconductor Index SOX, a 17% rise by the S&P 500 SPX and a 34% gain by the tech-heavy Nasdaq Composite COMP over the same span.
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September 06, 2023 08:24 ET (12:24 GMT)
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