Financial statement reporting from a multibillion-dollar company is not our usual fare, but if the company in question is having a significant impact on the PC gaming world, it's worth paying attention to how well things are going. AMD's 2024 Q1 revenue and operating profit have been announced, which is great news for its big processor division, but not so big for its gaming division.

On the financial side, AMD organizes everything into 4 key sectors: data center, client, gaming, and built-in. All Ryzen processors made make money for the client sector, but sales of Radeon GPUs and custom chips for consoles and handheld PCs are recorded in the game.

Throughout the second half of 2022 and the first half of 2023, the client department had lost money pretty badly, but over the past 6 months, things have been steadily improving. Compared with this time last year, the client's revenue improved by 85% and operating profit rose from a loss ofド172 million to a profit ofン86 million. This is a similar story with data center, which compared with 2023 Q1, with sales and operating profit of 81% and profit of 268%. "The significant year-on-year growth was driven by a significant increase in AMD Instinct MI300X GPU shipments and a 2-digit increase in server CPU sales."

What's not going very well is AMD's gaming division. Sales are down 33% compared to the previous quarter and 2023 by 48%, while operating income is down at a similar rate. Most of the money in that sector comes from a deal with Sony to design and manufacture processors for PlayStation5. Microsoft is doing the same kind of deal as Xbox Series X/S machines, and some of them have Radeon GPUs.

Since the PS5 was launched in 2020-11, the console is past its peak of sales and the PS5Pro being discussed will probably give AMD a bit of a boost, but as time goes on the game will probably continue to see its doom drop. Things will improve significantly only when the next generation of consoles comes along. AMD does not have a large share of the discrete graphics card market, its Radeon chips are enough to withdraw a lot of money.

As long as the gaming sector continues to make a profit, I don't think AMD really cares that much. We are far more interested in boosting revenue and operating profit in the data center division thanks to the seemingly endless money thrown into AI superchips by Meta, Microsoft, OpenAI, and others.

And, as we all remember, 2024 is the year of AI PCs, and it's not surprising that AMD has decided to sabotage neural processing units (NPU) to all Ryzen. AMD said that all major OEMs and system builders

"With the start of the corporate refresh cycle and the adoption of AI PCs, the market will return to annual growth in 2024 because it has had a rough time of things and will not make much money at all." "We believe that we are on track to achieve this goal," said Dr. Su. We see AI as the biggest inflection point for PCs since the Internet, with the ability to deliver unprecedented productivity and ease-of-use improvements."

You may not care about the notes about AI, but AMD reveals. With almost all the questions about the Gpu in the earnings call, the game was hardly discussed — AI and data centers are where all the money is.