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AMD’s second-quarter earnings report showed that its profit and revenue exceeded expectations, but its outlook for the third quarter was lower than Wall Street’s expectations, sending its stock down 6.8% after the bell.

　　AMD CEO Su Zifeng admitted at the earnings conference that although the company's notebook computer sales grew rapidly in the second quarter, the company was not optimistic about PC demand in the third quarter. Last week, AMD's "old rival" Intel reported second-quarter PC chip revenue was even more dismal. The two giants expressed pessimism together, indicating that the PC market may have really been "cool" in the short term.

　　The financial report shows that in the second fiscal quarter ended at the end of June:

• The company's adjusted earnings per share were $1.05, compared with the consensus estimate of $1.03;

• The company's revenue was $6.55 billion, slightly above consensus estimates of $6.53 billion;

• The company expected third-quarter revenue of $6.7 billion (plus or minus $200 million), compared with analysts' expectations of $6.83 billion.

• In terms of full-year guidance, AMD reiterated that sales this year will increase by about 60% to $26.3 billion (plus or minus $300 million), with data centers leading the way.

　　For AMD, its fiscal second quarter was impressive, especially in PC and server processors. Its main competitor, Intel, performed poorly in the same period, and its PC chip business revenue fell 25% year-on-year in the second quarter, bringing AMD a huge market opportunity.

　　AMD has now surpassed Intel in chip performance, and investors are watching to see if the company has enough supply and execution to take more market share from Intel.

　　By segment, AMD's four main business segments all grew during the quarter, with overall revenue soaring 70% year over year. in,

• Data center revenue, which includes chips for cloud computing and large enterprise customers, rose 83% year over year to $1.5 billion;

• Sales of the gaming chip business increased 32% year-over-year to $1.7 billion;

• Embedded business, which includes networking and automotive chips, had sales of $1.3 billion, aided by AMD's acquisition of Xilinx in the first quarter;

• Revenue from the client segment, which includes chips for PCs and laptops, rose 25% to $2.2 billion in the second quarter.

　　AMD said the growth in the customer segment was largely due to higher sales of mobile processors for notebook computers.

　　PC market outlook is not optimistic

　　However, there are signs of a slowdown in global computer sales after more than two years of the pandemic-fueled boom ended.

　　AMD CEO Su Zifeng also admitted that she expects a decline in the PC business in the current quarter.

　　"Our outlook for the PC business is more conservative. So, a quarter ago we thought that the PC business would decline -- the decline was thought to be in the high single digits at the time," Su said. The view from the business is that it's going to be down around 15%."

　　Research firm Gartner had previously forecast that worldwide PC shipments would drop by 13% in 2022. Chip revenue from the PC market will fall 5.4%.

　　Su Zifeng said at the earnings conference that AMD believes it is taking share in the server and personal computer markets. She expects demand for data centers, embedded businesses and game consoles to remain strong, in addition to the PC business.

　　AMD shares have fallen 31% this year. Shares in the company fell 6.8% in after-hours trading after announcing a more conservative earnings forecast on Tuesday.