Wall Street: AMD shares jump over 10% on bullish revenue forecast

Advanced Micro Devices Inc. (AMD) shares jumped more than 10 per cent in early trade on Wednesday after the chipmaker gave a bullish revenue forecast for third quarter on high demand for its new artificial intelligence chips.

At 11:45 a.m. EDT, the AMD shares were at $144.93, up $6.46 or 4.66 per cent.

On Tuesday, AMD shares had closed at $138.44.

The revenue will be roughly $6.7 billion in the third quarter, the company said on Tuesday.

It also raised its forecast for AI chips.

Santa Clara, California-based AMD's chief executive officer Lisa Su said on Tuesday that the company expects to generate more than $4.5 billion, up from an earlier target of $4 billion, in sales from its MI300 products this year.

“The overall view on AI investment is: We have to invest — the potential of AI is so large,” she said on a conference call with analysts. “The investment cycle will continue to be strong.”

AMD’s second quarter revenue topped Wall Street estimates, rising 8.9 per cent to $5.84 billion.

Its MI300 revenue beat $1 billion in the quarter.

Its earnings increased to 69 cents a share.

Cloud computing and enterprise customers are embracing AMD’s Instinct MI300X products, Lisa Su said.

“We continued accelerating our AI traction,” she said.

AMD’s data-center unit had sales of $2.8 billion in the second quarter, more than double the level from a year earlier.

AMD still gets most of its revenue from personal computer and server microprocessors.

Gaming revenue was down 59% at $648 million.

AMD said that the two main game consoles that use its chips are now in their fifth year.

Other chip stocks

Shares of AMD’s nearest rival Nvidia also rose more than 10 per cent in early trade.

Among other chip stocks, Broadcom advanced 7.3 per cent. Intel added 1.7 per cent and Qualcomm rose 4.7 per cent.