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The company recorded record revenues in the fourth quarter of 2024, driven by its data center business, although AI GPU sales fell short of market expectations. Could this be the potential end for Intel?
AMD closed the fourth quarter of 2024 with historic results, surpassing Intel for the first time in the data center segment. This milestone is attributed to the exponential growth of its server CPU business, which achieved a 69% year-over-year increase in revenue and a 74% rise in operating income.
However, not all news was positive for the company, as its gaming and AI and HPC GPU sales underperformed relative to expectations.
AMD’s Financial Results in Q4 2024
AMD’s total revenue in the fourth quarter of 2024 reached $7.658 billion, representing a 24% year-over-year increase. The company closed the year with record sales of $25.8 billion, solidifying its best financial performance to date.
✔ Net income Q4 2024: $7.658 billion (+24% YoY)
✔ Gross margin: 51%
✔ Net income for the year: $25.8 billion (+14% YoY)
✔ Annual net income: $1.641 billion
✔ Annual gross margin: 49%
Lisa Su, CEO of AMD, highlighted the company’s success in the data center segment, emphasizing the steady growth in this key area.
“Our performance in data centers and clients has been exceptional, and we are committed to continue driving innovation in AI and high-performance computing.”
AMD Dominates in Data Centers, Surpassing Intel
The data center business was AMD’s primary source of revenue for the quarter, with a record $3.860 billion in revenue, representing a 69% year-over-year growth and a 9% increase from the previous quarter.
✔ Data center segment revenue: $3.86 billion (+69% YoY)
✔ Operating income: $1.16 billion (+74% YoY)
For the first time in history, AMD surpassed Intel in this sector, as Intel’s data center and AI segment reported revenues of $3.400 billion, with only $200 million in operating income.
Despite these impressive results, market analysts were expecting higher sales of the Instinct MI300 GPUs for AI and high-performance computing (HPC), leading to some disappointment.
Strong Growth in Client CPU Business
The desktop and laptop CPU segment also showed outstanding performance, with a 58% year-over-year increase in revenue, reaching $2.310 billion.
✔ Client division revenue: $2.31 billion (+58% YoY)
✔ Operating income: $446 million (+711% YoY)
This growth is due to the strong demand for Ryzen processors for PCs and laptops, solidifying AMD’s position as one of the leading suppliers in the market.
Gaming and Console SoCs Weigh Down Results
While the data center and CPU businesses recorded positive results, the gaming division experienced a significant decline, with a 59% drop in revenue to $563 million, and a 78% decrease in operating income, down to $50 million.
✔ Gaming segment revenue: $563 million (-59% YoY)
✔ Operating income: $50 million (-78% YoY)
The main reasons for this decline were decreased demand for discrete Radeon GPUs and a reduction in orders for SoCs for Xbox and PlayStation, which significantly affected revenue in this segment.
Embedded Segment with Moderate Decline
The embedded chip business also recorded a 13% year-over-year decline, with revenues of $923 million and a 21% drop in operating income, coming in at $362 million.
✔ Embedded segment revenue: $923 million (-13% YoY)
✔ Operating income: $362 million (-21% YoY)
Compared to the previous quarter, revenues remained stable, although operating income decreased by 3%.
Conclusion: AMD Continues to Rise, but Faces Challenges in AI and Gaming
AMD has achieved a historic milestone by surpassing Intel in the data center market, demonstrating its leadership in the sector. However, the lower adoption of its Instinct MI300 GPUs for AI and the decline in the gaming segment highlight the challenges the company must address in 2025.
Despite these obstacles, AMD continues to consolidate its position in high-performance computing, artificial intelligence, and enterprise solutions, with sustained growth prospects in the coming quarters.
via: Tom’s Hardware