AMD announced its Q2 results, and while the news was better than expected, it was disappointing for the GPU division; AMD's gaming division remains profitable, all thanks to the bragging rights it spent to power both Microsoft and Sony's game consoles. This is a result of the effort expended to power both Microsoft's and Sony's game consoles.

The PlayStation 5 and Xbox Series X/S both use AMD's semi-custom silicon, which is part of the company's gaming business. The company has consistently increased sales throughout this year, but continued declining sales of Radeon GPUs has caused both sales and operating income to decline compared to Q1 results, let alone YoY.

We are used to seeing things decline compared to the same period last year, which was potentially the best revenue performance ever for AMD. The company's sales were $6.6 billion in the second quarter of 2022 and $5.4 billion in the second quarter of this year (aww, boo hoo ?). . However, while things seem to be picking up in the datacenter (thanks to upcoming AI investments in supercomputing) and especially in the client segment (CPUs and APUs), things are still significantly sluggish for graphics.

"Turning to the gaming segment, Dr. Lisa Su, CEO of AMD, said, "Revenues were down 4% YoY to $1.6 billion. On a quarter-over-quarter basis, segment revenue was down 10%. Semi-custom SoC sales were strong in the quarter as Microsoft and Sony reported strong console demand driven by improved global retail inventory and new AAA game launches.

Gaming remains AMD's biggest sales driver, but it was the client/CPU segment during the same period last year. Given that sales have halved in the past 12 months, one could argue that processors are even bleaker, but operating income is still a loss of $69 million, but that is significant growth compared to the beginning of the year.

This improvement on the client side echoes Intel's turnaround, which indicates that the PC industry will bounce back in 2023-2024.

AMD is hoping that a new set of "enthusiast class" graphics cards will turn things around and help bring discrete GPU sales back to more friendly levels. Dr. Su has announced that the new cards will be available within the next three months, either around September He expects the RX 7800 and RX 7700 boards to appear around Gamescom in September or shortly thereafter. [The RX 7800 is expected to undercut the RTX 4070 and outperform it, meaning that AMD will likely regain the GPU market share it lost.

In some ways, however, it seems a bit counterintuitive that AMD's GPU sales have been so low through this year.

Prices for RTX 3060 and RTX 3060 Ti cards remained high before and after the launch of the RTX 40 series GPUs, while AMD's Radeon RX 6000 series cards became increasingly affordable and much more attractive. However, with the global economy struggling, overall demand may not have reached that level, and there is still significant inventory in stores.

A new GPU that can offer more performance than the RTX4070, or even the RTX3080, for less money should be a shot in the arm, but we will see how that goes once the new cards actually hit the market.