Advanced Micro Devices reported that income in its second quarter was $5.36 billion, down 18% from a 12 months earlier because the consumer PC market continues to climb again in the course of the financial downturn.

However traders took the report as excellent news, as AI-related shares akin to AMD, which makes the processors and graphics processing models (GPUs) utilized in AI machines, are using on excessive demand for AI. In after-hours buying and selling, AMD’s inventory rose 5% to $123.5 a share. PC market circumstances additionally improved from the earlier quarter. In consequence, AMD beat expectations for each revenues and web revenue.

Analysts anticipated Q2 earnings per share to come back in at 57 cents on income of $5.31 billion. GAAP web revenue for Q2 got here in at $27 million, or 2 cents a share, down 93% from a 12 months in the past. On a non-GAAP foundation, web revenue for Q2 was $948 million, or 58 cents a share, down 45% from a 12 months in the past. So, AMD beat the numbers on each web revenue and revenues.

“We delivered sturdy ends in the second quarter as 4th Gen Epyc and Ryzen 7000 processors ramped considerably,” stated AMD CEO Lisa Su, in a press release. “Our AI engagements elevated by greater than seven occasions within the quarter as a number of prospects initiated or expanded applications supporting future deployments of Intuition accelerators at scale. We made sturdy progress assembly key {hardware} and software program milestones to deal with the rising buyer pull for our information heart AI options.”

She stated the corporate is on monitor to launch and ramp manufacturing of MI300 accelerators within the fourth quarter.

“We’re happy with our second quarter execution,” stated AMD CFO Jean Hu, in a press release. “Seeking to the third quarter, we count on our information heart and consumer phase revenues to every develop by a double-digit share sequentially pushed by growing demand for our Epyc and Ryzen processors, partially offset by gaming and embedded phase declines.”

AMD additionally stated it expects about $5.7 billion in gross sales within the present third second quarter, plus or minus $300 million. It expects non-GAAP gross revenue margins of 51%.

Amongst AMD’s divisions, AMD’s consumer group, which incorporates PC processor gross sales, noticed a large decline from a 12 months in the past. AMD reported $998 million in gross sales for the consumer group, down 54% from a 12 months in the past. Income was up 35% sequentially as AMD Ryzen 7000 Collection CPUs ramped considerably and PC market circumstances improved. Greater than 100 AMD-powered business PC platforms are set to launch this 12 months.

For the info heart, AMD gross sales fell 11% to $1.3 billion in comparison with final 12 months. That was as a consequence of decrease third-generation Epyc processor gross sales as enterprise demand was tender and cloud stock ranges have been elevated at some prospects. AMD stated there are greater than 670 AMD-powered cloud situations publicly out there. And AMD Intuition MI300A and MI300X GPUs are sampling to high-performance computing, cloud and AI prospects. Sequentially, income was up 2% as 4th Gen AMD Epyc CPU revenues doubled and Epyc CPU enterprise gross sales elevated, offset by a decline in adaptive system-on-chip information heart merchandise.

The embedded phase, which incorporates networking chips, grew 16% to $1.5 billion in comparison with a 12 months in the past due to energy within the Industrial, Imaginative and prescient and Healthcare, Automotive and Check and Emulation markets. Income was down 7% from the earlier quarter primarily based on softness within the communications market.

AMD’s gaming phase, which incorporates graphics processors for PCs in addition to chips for consoles just like the Ps 5 and Xbox Collection X/S, reported $1.6 billion in gross sales, up 16% from a 12 months in the past. That was pushed by progress in semi-custom chips, offset by decrease gaming graphics gross sales. Income declined 10% sequentially primarily as a consequence of decrease gaming graphics gross sales.

Final week, AMD’s rival Intel reported Intel reported web revenue of $500 million, or 13 cents a share, in contrast with a revenue of $1.1 billion, or 28 cents a share, a 12 months earlier, on revenues of $12.9 billion, down 15% from a 12 months in the past for the second quarter ended July 1.

Through the quarter, AMD confirmed off its code-named Bergamo and Genoa-X Epyc CPUs. And its fourth-generation Epyc chips have been picked up by prospects akin to AWS, Alibaba, Microsoft Azure and OCI. Cerebras unveiled its Condor Galaxy 1 cloud-based AI supercomputer with greater than 70,000 AMD Epyc CPU cores.