00:00 Speaker A
This will be a great indicator for AI trading. Well, last week’s report had very different results, as we saw from Meta and Microsoft. Oh, and there was a big reaction to them too. Obviously, Microsoft lost a huge amount of value and then we saw a huge increase, but this gives us a better idea of what these companies’ spending will look like going forward. Both companies have clearly increased their capital spending, and we expect Amazon and Google to do the same. And a significant portion of that goes into AI chips, which AMD manufactures.
00:26 Dan
So, for this quarter, we expect AMD to report EPS of $32 on revenue of $9.6 billion. This is up from $9 billion and $7.7 billion in the same period last year.
00:41 Dan
On the data center side, the company expects revenue of $4.97 billion. That’s an increase of 29%. On the client side, this is where the PC comes into play. We expect the quarter to top out at $2.9 billion.
00:57 Dan
And then for games, it’s going to be around 49.2 billion, sorry, 1.3 billion. Um, sorry, 88 million within that quarter. So these are going to be some big changes for the company going forward. Um, you know, we’re expected to hear more about the new chip from um CEO Lisa Su. She spoke about them at CES in January. Um, their Helios uh platform, that’s going to be a large scale server server system, um, new PC chip that’s coming out.
01:31 Speaker A
Dan, one more question. This is a broader question. It’s not just about AMD, Dan, it’s about the impact of this memory shortage on the PC industry. How should we think about that, as consumers and investors?
01:48 Dan
Well, this is going to continue for a while. I was just talking to some analysts about this. Because I’m working on a piece related to low memory and low storage. Because it’s not just about RAM. We talked about things like HBM, but that’s not all. It is also a storage where data is stored for a long time. With this AI enhancement, that too is missing. And that can affect the price of PCs, essentially consumer devices that use RAM, most computers. So PC prices could go up, which could cause demand destruction, impacting not only AMD but also its client-side rival Intel. So we always have to keep an eye on what that means for specific markets. For low-margin products, low-priced PCs can increase in price. Otherwise, AMD will suffer some damage and its profit margins will decrease. If it’s on the high end, a slight increase in price might not matter too much, but this is going to be around for quite a while. You can’t start a factory overnight.
02:51 Speaker A
And finally, Dan, just real quick, what do you expect AMD to do with their upcoming GPUs?
02:59 Dan
Yeah, they have a new GPU that they announced at CES. That will be the next generation system. They say it delivers 1000x better performance than the two-generation system. It’s MI300. Well, this would be MI 500. Well, that’s going to be their next generation system. As I said, they also have a rack scale system called Helios. AMD CEO Lisa Su says it’s the best AI server in the world, but that’s clearly just a swipe at Nvidia. Nvidia obviously has its own rackscale servers. The NVL 72, which will also include 72 GPUs in Helios, should be huge when it eventually starts being integrated into these data centers. So we need to see what the reactions are to them. What happens after that when more cloud companies buy in from AMD and start acquiring what they have?
