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With AMD's stock down by 9% in premarket trading after yesterday's lackluster fourth-quarter earnings report, which saw the firm miss analyst estimates for data center revenue and guide a tepid first quarter, the firm nevertheless managed to earn more revenue from the business division than Intel did during the same time period. AMD's fourth quarter saw it rake $3.86 billion through selling CPUs and GPUs to the data center industry. On the other hand, while AMD's data center revenue marked a 69% annual growth, Intel's fourth-quarter data center revenue sat at $3.4 billion and was down by 3% annually.
AMD Crosses Intel In Data Center Revenue In Second Consecutive Quarter
AMD's fourth quarter wasn't the first time the firm managed to beat Intel in the data center business. Unlike Intel, AMD is capable of designing and selling GPUs and CPUs in volume to data center customers. The high-end GPUs part of AMD's data center business are its Instinct accelerators, which are designed to cater to AI workloads. On the flip side, Intel's data center revenue comes primarily through its Xeon processors, accompanied by its Gaudi AI accelerators.
During the fourth quarter, AMD's balanced portfolio of EPYC CPUs and Instinct accelerators enabled the firm to earn $3.86 billion through its data center business. This marked a strong 69% annual growth and kept pace with AMD's rapid growth in a business that had earned $2.28 billion in revenue during Q4 2023.
In comparison with AMD's $3.86 billion data center revenue, Intel earned $3.4 billion via the Data Center and AI (DCAI) business during the fourth quarter. This marked a 3% annual drop and a small $100 million sequential growth. During Q3, Intel had earned $3.3 billion via DCAI which meant that the business' revenue grew by 9% annually.
In the age of AI, AMD has aggressively pushed towards mergers and acquisitions to grow its data center business. One such deal is its $3.7 billion cash offer to buy server manufacturer ZT Systems. AMD announced the deal in August last year, and outlined that the benefits of the transaction would be visible on the income statement by the end of this year.
On the day of its earnings, i.e. yesterday, AMD notified the European Comission of the deal. Now, as per Dow Jones, the Commission has started its preliminary scrutiny to determine whether to launch a detailed investigation or clear the deal. The Commission expects to reach a decision on the matter by March 12th.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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