AMD's data center revenue doubles as gaming loses ground
What's the story
AMD has reported a massive surge in its data center revenue, driven by the increasing demand for artificial intelligence (AI) capacity. The company's latest earnings report shows that its data center revenue more than doubled year-on-year (YoY) to $6.7 billion, up from $5.8 billion in Q1 and a whopping 107% increase from the $3.2 billion it posted during the same period last year.
Future projections
Data center revenue to more than double YoY in 2027
During Tuesday's earnings call, AMD CEO Lisa Su projected that the company's data center segment revenue would more than double YoY in 2027.
This prediction comes as a response to the growing demand for AI capacity and the company's strong performance in this area.
Despite this positive outlook, Su also acknowledged challenges in other areas of the business, particularly gaming.
Gaming slump
Gaming revenue takes a hit
AMD's gaming revenue has taken a major hit, falling 31% YoY to $779 million.
The decline is attributed to price hikes and component shortages that have slowed down sales for popular consoles like Xbox Series X/S, PS5, and Valve's Steam Deck.
Su told analysts on a call after the earnings were released that "Gaming graphics revenue also declined year-over-year, as higher industry-wide component costs contributed to higher graphics card prices and weighed on overall demand."
Revenue growth
Overall revenue reaches record $11.5 billion
Despite the slump in gaming, AMD's overall revenue has seen a massive 50% year-on-year increase to a record $11.5 billion.
This growth is mainly attributed to the continued strength of its data center business, which accounted for 58% of the company's revenue in the quarter.
The company's overall PC and gaming business revenue also grew six percent compared to last year, with client revenue up by an impressive 23% thanks to Ryzen processor sales.