The Six Five team discusses AMD Q1/24 earnings.
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Transcript:
Daniel Newman: AMD, I mean some great numbers, but what did the market have to say about that?
Patrick Moorhead: Yeah. So amazing numbers on what I consider their core businesses, right? Data center up 80%, PC up 85%, but big drop-offs in gaming and embedded. The market is looking for a beat-beat raise or you get blown out. And AMD saw what a 9% decline based on what was a really good quarter because the street wanted a revision up. So let’s peel back the onion here. And the outlook was slightly lower than expected. So data center, like I said, up 80%, and that’s a combination of the MI300 data center AI GPU and of course EPYC. Lisa had talked about, she believed that while they don’t split out their numbers between MI and EPYC, Lisa said that they gained revenue share citing what has been a soft spot in the market and for AMD, and that was enterprise.
So next generation of EPYC it’s called Turin. Lisa said the silicon is looking great. That means on schedule for those who are counting up there. But the most important thing was that they upgraded the MI300 number from 4 billion to 3.5. And Dan, you and I have been chronicling this for-
Daniel Newman: Other way around, dude, 3.5 to 4.
Patrick Moorhead: Oh, sorry, 3.5 to 4, thank you. We’ve been chronicling this since I think the initial number was a billion or something super, super low. I do believe, and I’m sticking to my guns and watch a show we did in September, sorry, December that I think at the end it’ll be about $6 billion for the year.
And on PC, I mean it was in the doldrums, it was post the C-word, which I won’t use. Up big time. It’s the Ryzen 8000 that’s carrying the water here. That’s the brand new design from the company. And gaming, I mean down 48%, Radeon console. And I got to tell you, I just don’t know what turns around this business and I know it’s very heavily weighted to console. And if the company doesn’t bring out, if Microsoft and Sony don’t bring out new consoles, then how do you do that? But it’s the PC gaming that is disappointing and we’re going to have to see for the Nvidia comp when it comes down.
The Xilinx business, AMD calls it embedded, down 46%, very much very similar to Altera, which was off 58%. Xilinx was off 46%. Listen, the market’s trash and their numbers were in the toilet and there’s really nothing that the company can do out there. We’ll talk about how Lattice outperformed all the FPGA folks a little bit later. So listen, tough environment, AMD crushed it on their core businesses and they’re rewarded with a 9, 10% decline.
Daniel Newman: Isn’t it funny? Isn’t it funny, Pat? I mean look, this is where I was talking about earlier when I went on yesterday on the show and I talked about having to be perfect. And perfect, by the way, seems to be very … There was only one number that anyone cared about. I’m just being candid. With AMD there was one number that anybody cared about. It was the MI300 number. The three and a half billion revision to four just simply was not enough growth.
You have heard about this $400 billion TAM over the next few years for infrastructure or for silicon for AI.
And people want to see, I think they wanted to see five, you heard numbers like five and six whisper. And I think Lisa’s being conservative. I think the fact is, you said this, I’m going to agree with you. I think she knows there’s a great possibility of more. I did hear a number, I believe in one of the calls we were on. I heard a number of a hundred customers though. Obviously there’s a high density to a couple of hyperscalers. And of course we know that Nvidia is kind of feasting and famineing on a handful of hyperscalers itself. And then it has a few of these new AI.
I did a Fortune interview this week about not Coherent, CoreWeave. And CoreWeave got this huge valuation growth. And these small group, the small cohort of companies is buying up tons and tons of these GPUs. And I was talking to … God, I’m trying to remember who I was talking to. The question was effectively, is this the biggest front load of all time? Meaning is this market this incredible front load and then we’re going to have to wait, right? I mean at some point they’re going to have a lot of this infrastructure is going to be built out and the killer apps, I mean they’re coming. Of course, we’re seeing things being built in real time. I saw some cool app that I think can replace me entirely this week. It was awesome.
Patrick Moorhead: Man, I hope I get replaced someday. It would be …
Daniel Newman: Hurry up. Hurry.
Patrick Moorhead: I know.
Daniel Newman: Hurry up. But, oh yeah, it was Will Koulouris. I was talking on Street Signs the other night and he asked me, “Is this the biggest front load of all time? Is this … ” I mean it was a good question because can this buying rate, and that’s what I’m also saying, is this growth-over-growth period, I mean when people are looking at markets, it’s like yeah, 357% or whatever number and video was last quarter. Now they got to grow the last year at the same time. Now they got to grow over the 350%, the 50% they grew a year ago. So what if they only grow 50% over 350? Are people going to be frustrated?
Patrick Moorhead: I mean, everybody’s got their spreadsheet and you’re a smart guy, you’ve got the degree. I’ve got the degree. I mean it’s basically net cash flows to infinity is the value of the company, so.
Daniel Newman: Yeah. I mean look, there is no satisfactory number. There seems to be a couple of things people are focused on. With AMD it was that number. With other companies, it’s the CapEx spend. I mean, why did Meta get crushed, and Google and Microsoft got a big backing? And the difference was pretty much just Zuck’s perspective on how much investment was going to be required to keep growing.
I’m pretty sure from a standpoint of cash flow created in profitability and growth, Meta is off the charts in terms of how profitable they are. But people don’t want them spending on virtual, on Reality Labs because everybody’s going to be buying, apparently according to Tim Cook this week, everybody’s going to be buying one of those 27 pound headsets because they’re doing awesome. God, what a crock of shit. Anyways, that whole call, that whole … Anyway, we’ll come to that later. I don’t have much else to say. You hit the AMD thing. I mean look, the only other thing I’d say is the ramp on Ryzen looks great. I mean Intel had a great 31% growth in client. You and I were kind of cheering them because there wasn’t much else to cheer in that number. And then …
Patrick Moorhead: AMD shows up, does the mic drop to 85?
Daniel Newman: Jeez, I mean. And obviously it wasn’t max, so it’s not … They’re winning share. I mean they’re growing share. They’re doing very, very well right now. So AI PC is really coming later. It’s not even here yet and they’re still getting these great numbers. So just wait for that. So that’s all I got to say about that.
Patrick Moorhead: Yeah. Hey, one little adder, I think AMD’s data center business is honing in on the size of Intel’s.
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
