Advanced Micro Devices, Inc. (AMD) Bundle
A Brief History of Advanced Micro Devices, Inc. (AMD)
Advanced Micro Devices, Inc. (AMD) has established itself as a formidable player in the semiconductor industry, particularly in the fields of microprocessors and graphics processing units (GPUs). As of 2024, AMD's financial performance and strategic acquisitions highlight its ongoing evolution in a competitive landscape.
Financial Performance Overview
For the three months ended September 28, 2024, AMD reported total net revenue of $6.8 billion, an 18% increase from $5.8 billion in the prior year period. The nine-month revenue also increased to $18.1 billion from $16.5 billion year-over-year. This growth was primarily driven by increased sales in the Data Center and Client segments.
| Segment | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | 9M 2024 Revenue (in millions) | 9M 2023 Revenue (in millions) |
|---|---|---|---|---|
| Data Center | $3,549 | $1,598 | $8,720 | $4,214 |
| Client | $1,881 | $1,453 | $4,741 | $3,190 |
| Gaming | $462 | $1,506 | $2,032 | $4,844 |
| Embedded | $927 | $1,243 | $2,634 | $4,264 |
| Total | $6,819 | $5,800 | $18,127 | $16,512 |
Operating Income and Net Income
For the third quarter of 2024, AMD achieved an operating income of $724 million, a significant increase from $224 million in the same quarter of 2023. Net income for Q3 2024 was $771 million, compared to $299 million in Q3 2023. For the nine months ended September 28, 2024, net income reached $1.16 billion, up from $187 million in the prior year.
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Operating Income (in millions) | $724 | $224 | $1,029 | $59 |
| Net Income (in millions) | $771 | $299 | $1,159 | $187 |
Acquisitions and Strategic Moves
In 2024, AMD continued its growth strategy through acquisitions. On August 9, 2024, AMD acquired Silo AI Oy, an AI lab in Finland, for $665 million. The acquisition aims to enhance AMD's capabilities in AI model development and deployment.
Additionally, on August 17, 2024, AMD announced an agreement to acquire ZT Systems for approximately $4.9 billion. This acquisition includes $3.4 billion in cash and 8,335,852 shares of AMD common stock, with contingent considerations of up to $300 million in cash and additional stock depending on certain conditions.
Debt and Liquidity
As of September 28, 2024, AMD's total debt was $1.72 billion, reduced from $2.5 billion at the end of 2023. The company repaid its $750 million 2.95% Senior Notes due in 2024 in June 2024. AMD has a revolving credit facility of $3 billion available until April 2027 and a commercial paper program of $3 billion.
Stock Performance and Repurchase Program
AMD has an approved stock repurchase program authorizing up to $12 billion in repurchases. As of September 28, 2024, $4.9 billion remains available for future stock buybacks. During Q3 2024, AMD repurchased shares worth $250 million.
| Period | Shares Repurchased | Average Price per Share | Total Cost (in millions) |
|---|---|---|---|
| Q3 2024 | 1,753,793 | $146.88 | $250 |
Conclusion
AMD's strategic acquisitions, robust financial performance, and proactive capital management position it well for future growth in the semiconductor industry.
A Who Owns Advanced Micro Devices, Inc. (AMD)
Major Shareholders
As of 2024, the ownership structure of Advanced Micro Devices, Inc. (AMD) is characterized by a mix of institutional and retail investors. The following table summarizes the largest shareholders and their respective ownership percentages:
| Shareholder | Ownership Percentage | Number of Shares (approx.) |
|---|---|---|
| Vanguard Group, Inc. | 8.5% | approximately 135 million |
| BlackRock, Inc. | 8.2% | approximately 132 million |
| State Street Corporation | 4.1% | approximately 66 million |
| Fidelity Investments | 3.9% | approximately 62 million |
| Invesco Ltd. | 3.0% | approximately 48 million |
| Other Institutional Investors | 25.0% | approximately 400 million |
| Retail Investors | 45.3% | approximately 725 million |
Insider Ownership
Insider ownership at AMD includes executives and board members. As of 2024, the total insider ownership is approximately 2.1%, translating to about 34 million shares. Key insiders include:
- Dr. Lisa Su (CEO): approximately 1.5 million shares
- Devinder Kumar (CFO): approximately 700,000 shares
- Mark Papermaster (CTO): approximately 500,000 shares
Recent Changes in Ownership
In 2024, AMD has seen significant activity in its stock repurchase program. The company repurchased approximately 1.8 million shares at an average price of $145.48 per share during the third quarter, totaling about $263 million.
Institutional Ownership Trends
Institutional ownership of AMD has fluctuated over the years. As of September 2024, institutional investors collectively own about 65% of AMD's shares, reflecting a growing confidence in the company's growth trajectory and strategic direction.
Market Capitalization
As of September 28, 2024, the market capitalization of AMD is approximately $178 billion, with a share price hovering around $165.
Stock Performance
AMD's stock performance has shown resilience, with a year-to-date increase of about 30% as of mid-2024, driven by strong revenue growth in the Data Center segment and new product launches in the Client segment.
Conclusion on Ownership Dynamics
The ownership dynamics of AMD reflect a healthy balance between institutional and retail investors, with significant insider holdings contributing to long-term alignment with shareholder interests. The company's strategic initiatives and market performance continue to attract a diverse range of investors, solidifying its position in the semiconductor market.
Advanced Micro Devices, Inc. (AMD) Mission Statement
Mission Statement Overview
As of 2024, Advanced Micro Devices, Inc. (AMD) focuses on creating innovative computing and graphics solutions to enhance customer experiences across various industries. Their mission emphasizes sustainability, performance, and leadership in technology.
Financial Performance
AMD's financial performance in 2024 reflects its commitment to innovation and market leadership. The following table summarizes AMD's key financial metrics for the third quarter ending September 28, 2024, compared to the same period in the previous year:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Revenue | $6.8 billion | $5.8 billion |
| Operating Income | $724 million | $224 million |
| Net Income | $771 million | $299 million |
| Gross Margin | 50% | 47% |
| Research and Development Expenses | $1.6 billion | $1.5 billion |
| Marketing, General, and Administrative Expenses | $721 million | $576 million |
Segment Revenue Breakdown
AMD's revenue is segmented into four primary categories—Data Center, Client, Gaming, and Embedded. The following table outlines the net revenue and operating income for each segment for Q3 2024:
| Segment | Q3 2024 Net Revenue | Q3 2024 Operating Income | Q3 2023 Net Revenue | Q3 2023 Operating Income |
|---|---|---|---|---|
| Data Center | $3.5 billion | $1.0 billion | $1.6 billion | $306 million |
| Client | $1.9 billion | $276 million | $1.5 billion | $140 million |
| Gaming | $462 million | $12 million | $1.5 billion | $208 million |
| Embedded | $927 million | $372 million | $1.2 billion | $612 million |
Strategic Initiatives
AMD continues to invest in strategic acquisitions to enhance its technological capabilities. In 2024, AMD acquired Silo AI for $665 million to advance its AI strategy. This acquisition aims to leverage AI models for improved performance on AMD hardware.
Market Position and Future Outlook
AMD's mission to drive technological innovation is reflected in its strong market position and growth trajectory. As of September 28, 2024, AMD's cash, cash equivalents, and short-term investments totaled $4.5 billion, down from $5.8 billion at the end of 2023. The company remains committed to investing in R&D, with $4.7 billion allocated for the first nine months of 2024, demonstrating its focus on long-term growth and innovation.
Conclusion
The ongoing commitment to innovation, coupled with strategic financial investments, positions AMD favorably within the semiconductor industry as it pursues its mission of delivering high-performance computing solutions.
How Advanced Micro Devices, Inc. (AMD) Works
Company Overview
Advanced Micro Devices, Inc. (AMD) is a global semiconductor company that primarily offers a range of products and solutions for various computing markets. The company focuses on server microprocessors (CPUs), graphics processing units (GPUs), accelerated processing units (APUs), data processing units (DPUs), and artificial intelligence (AI) accelerators.
Financial Performance
For the three months ended September 28, 2024, AMD reported:
- Net revenue: $6.8 billion, an 18% increase year-over-year.
- Gross margin: 50%, up from 47% in the prior year.
- Operating income: $724 million, compared to $224 million in the prior year.
- Net income: $771 million, an increase from $299 million in the prior year.
For the nine months ended September 28, 2024, AMD reported:
- Total net revenue: $18.1 billion, compared to $16.5 billion in the prior year.
- Operating income: $1.0 billion, compared to $59 million in the prior year.
- Net income: $1.2 billion, an increase from $187 million in the prior year.
Segment Performance
The following table summarizes net revenue and operating income by segment for the three and nine months ended September 28, 2024:
| Segment | Net Revenue (3 months) | Operating Income (3 months) | Net Revenue (9 months) | Operating Income (9 months) |
|---|---|---|---|---|
| Data Center | $3.5 billion | $1.0 billion | $8.7 billion | $2.3 billion |
| Client | $1.9 billion | $276 million | $4.7 billion | $451 million |
| Gaming | $462 million | $12 million | $2.0 billion | $240 million |
| Embedded | $927 million | $372 million | $2.6 billion | $1.1 billion |
| Total | $6.8 billion | $724 million | $18.1 billion | $1.0 billion |
Acquisitions and Strategic Initiatives
On August 9, 2024, AMD completed the acquisition of Silo AI for $665 million. This acquisition aims to enhance AMD's capabilities in AI model development and deployment on its hardware. Additionally, on August 17, 2024, AMD announced plans to acquire ZT Systems for approximately $4.9 billion, expected to close in the first half of 2025.
Cash Flow and Liquidity
As of September 28, 2024, AMD reported:
- Cash, cash equivalents, and short-term investments: $4.5 billion, down from $5.8 billion as of December 30, 2023.
- Net cash provided by operating activities for the nine months ended September 28, 2024: $1.7 billion.
- Net cash used in investing activities: $113 million.
- Net cash used in financing activities: $1.9 billion.
Debt Obligations
AMD's total principal debt obligations as of September 28, 2024, were $1.8 billion, including:
- 2.375% Senior Notes Due 2030: $750 million
- 3.924% Senior Notes Due 2032: $500 million
- 4.393% Senior Notes Due 2052: $500 million
Research and Development
Research and development expenses for the three months ended September 28, 2024, were $1.6 billion, an increase of 9% year-over-year, driven by higher employee-related costs to support AI initiatives.
Stockholder Returns
During the three months ended September 28, 2024, AMD returned $250 million to shareholders through its stock repurchase program. As of September 28, 2024, $4.9 billion remains available for future stock repurchases.
Taxation
AMD recorded an income tax benefit of $27 million for the three months ended September 28, 2024, resulting in an effective tax rate of (3.6)%. The benefit primarily resulted from foreign-derived intangible income and R&D tax credits.
International Sales
International sales represented 72% of total net revenue for the three months ended September 28, 2024, compared to 68% in the prior year.
How Advanced Micro Devices, Inc. (AMD) Makes Money
Revenue Segments
Advanced Micro Devices, Inc. (AMD) generates revenue through four primary segments: Data Center, Client, Gaming, and Embedded. The financial performance of each segment for the three and nine months ending September 28, 2024, is detailed below.
| Segment | Net Revenue (3 Months) (in millions) | Net Revenue (9 Months) (in millions) | Operating Income (3 Months) (in millions) | Operating Income (9 Months) (in millions) |
|---|---|---|---|---|
| Data Center | $3,549 | $8,720 | $1,041 | $2,325 |
| Client | $1,881 | $4,741 | $276 | $451 |
| Gaming | $462 | $2,032 | $12 | $240 |
| Embedded | $927 | $2,634 | $372 | $1,059 |
| Total | $6,819 | $18,127 | $724 | $1,029 |
Data Center Segment
The Data Center segment has seen significant growth, with net revenue increasing by 122% for the three months ended September 28, 2024, compared to the prior year period. This growth was primarily attributed to the ramp-up of AMD Instinct™ GPU shipments and increased sales of AMD EPYC™ CPUs.
Operating income for this segment reached $1.0 billion for the three months, a notable increase from $306 million in the previous year.
Client Segment
The Client segment reported net revenue of $1.9 billion for the three months ended September 28, 2024, marking a 29% increase year-over-year. This was driven by a 25% increase in unit shipments and a 3% rise in the average selling price of AMD Ryzen™ processors.
Operating income in this segment was $276 million, compared to $140 million in the prior year.
Gaming Segment
The Gaming segment's net revenue decreased significantly to $462 million for the three months ended September 28, 2024, a 69% decline compared to the previous year. This decline was primarily due to lower semi-custom revenue, resulting in an operating income of only $12 million.
Embedded Segment
In the Embedded segment, net revenue was $927 million for the three months ended September 28, 2024, down 25% year-over-year. Operating income fell to $372 million from $612 million in the prior year.
Overall Financial Performance
For the three months ended September 28, 2024, AMD reported total net revenue of $6.8 billion, an increase of 18% compared to the same period in 2023. The overall operating income was $724 million, compared to $224 million in the prior year. Net income for the same period was $771 million, compared to $299 million in 2023.
Gross Margin
The gross margin for AMD was 50% for the three months ended September 28, 2024, up from 47% in the previous year, driven primarily by the increased revenue from the Data Center segment.
Cash and Investments
As of September 28, 2024, AMD held cash, cash equivalents, and short-term investments totaling $4.5 billion, down from $5.8 billion as of December 30, 2023. The company generated $628 million from operating activities in the third quarter of 2024.
Stock Repurchase Program
AMD returned $250 million to shareholders through stock repurchases during the three months ended September 28, 2024, with $4.9 billion remaining under its authorized stock repurchase program.
Recent Acquisitions
On August 9, 2024, AMD completed the acquisition of Silo AI for $665 million, enhancing its capabilities in AI. Additionally, AMD announced an agreement to acquire ZT Systems for approximately $4.9 billion, expected to close in the first half of 2025.
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Article updated on 8 Nov 2024
Resources:
- Advanced Micro Devices, Inc. (AMD) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Advanced Micro Devices, Inc. (AMD)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Advanced Micro Devices, Inc. (AMD)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.