AMD Outperforms Intel, Achieving 13.5% Increase in Data Center and AI Revenue in Q4

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Following a disappointing fourth-quarter earnings report, AMD’s stock experienced a 9% decline in premarket trading. The company fell short of analyst projections for data center revenue and provided a lackluster forecast for the upcoming first quarter. Nonetheless, AMD’s revenue from its data center division outpaced Intel’s figures during this reporting period. Specifically, AMD generated $3.86 billion from sales of CPUs and GPUs directed toward the data center market. In contrast, while AMD celebrated a remarkable 69% year-over-year growth in data center revenue, Intel’s revenue in this sector was $3.4 billion, reflecting a 3% decline compared to the previous year.

AMD Surpasses Intel in Data Center Revenue for Two Quarters Running

This isn’t the first instance where AMD has eclipsed Intel in the data center revenue arena. AMD differentiates itself through its ability to design and manufacture GPUs and CPUs in significant volumes to meet the demands of data center clients. Among the notable offerings in AMD’s data center portfolio are the high-performance Instinct accelerators, tailored specifically for AI-related workloads. Conversely, Intel’s data center revenue primarily stems from its Xeon processors and Gaudi AI accelerators.

During its fourth quarter, AMD’s diverse lineup—which includes EPYC CPUs and Instinct accelerators—allowed the company to achieve $3.86 billion in revenue from its data center operations. This impressive figure not only represents a robust 69% growth year-over-year but also underscores AMD’s swift advancements in this competitive sector, which brought in $2.28 billion in revenue during Q4 of 2023.

In a comparative analysis, AMD’s achievement of $3.86 billion in data center revenue stands against Intel’s performance of $3.4 billion in their Data Center and AI (DCAI) segment for the fourth quarter. This was accompanied by a modest 3% year-over-year decline, although Intel did see a minor sequential growth of about $100 million, up from $3.3 billion in Q3. In that same quarter, Intel experienced a notable 9% year-over-year growth in DCAI revenue.

With the rise of AI, AMD is pursuing an aggressive strategy of mergers and acquisitions to expand its footprint in the data center market. A key piece of this strategy is a $3.7 billion cash offer to acquire server manufacturer ZT Systems, a deal AMD announced last August. AMD anticipates that the benefits of this acquisition will be reflected in its financial statements by the end of this year.

On the day of its earnings announcement, AMD informed the European Commission about the acquisition deal. According to Dow Jones, the Commission has initiated a preliminary investigation to determine if a deeper inquiry is necessary or if the deal can proceed without complications. A decision regarding this matter is expected by March 12.

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