Silicon Rivalry: NVDA, INTC, and AMD Revenue Battle

Good Morning,

Welcome to another edition of ChartWiz, where we break down financial data into easy-to-digest insights. In today’s edition, we delve into the financial performance of three semiconductor giants: NVIDIA (NVDA), Intel (INTC), and AMD. By dissecting their revenue growth across key business segments and geographical regions, we aim to uncover the trends driving their success and the factors influencing their market positioning.

And with that, welcome to ChartWiz!

Nvidia (NVDA) - RECENT EARNINGS BREAKDOWN

Key Highlights for their September, 2024 Quarter

• Revenue for the three months ended October 27, 2024, was $35,082 million, compared to $18,120 million for the same period in the previous year.

• Operating income for the three months ended October 27, 2024, was $21,869 million, compared to $10,417 million for the same quarter last year.

• Total shareholders' equity increased from $42,978 million to $65,899 million.

• Net income increased significantly from $17,475 million to $50,789 million year over year.

• Common stock shares repurchased during the three months ended October 27, 2024 totaled 92 million.

• Net cash provided by operating activities increased to $47,460 million from $16,591 million.

• Repurchases of common stock increased significantly to $25,895 million from $6,874 million.

• Compute & Networking segment revenue for the three months ended October 27, 2024, was $31,036 million, compared to $14,645 million for the three months ended October 29, 2023.

• Data Center revenue was $35.1 billion, up 94% year-over-year and up 17% sequentially.

• Net income for the three months ended October 27, 2024, reached $19,309 million, compared to $9,243 million for the same quarter in the previous year.

• Research and development expenses increased to $3,390 million for the three months ended October 27, 2024, compared to $2,294 million in the same period last year.

• Cash dividends declared and paid during the three months ended October 27, 2024 amounted to $245 million.

• Net income for the three months ended October 27, 2024, was $19.3 billion, compared to $9.2 billion for the three months ended October 29, 2023.

• Research and development expenses increased from $701 million for the three months ended October 29, 2023, to $910 million for the three months ended October 27, 2024.

• Dividends paid increased to $589 million from $296 million.

• In May 2024, we announced a ten-for-one stock split of our issued common stock.

• Purchases related to property and equipment and intangible assets increased to $2,159 million from $815 million.

• Data Center revenue increased to $30,771 million for the three months ended October 27, 2024, compared to $14,514 million for the same period in the previous year.

• Revenue growth in Q3 FY 2025 driven by data center compute and networking platforms for accelerated computing and AI solutions.

• Compute revenue rose to $27,644 million for the three months ended October 27, 2024, up from $11,908 million year-over-year.

• Strong demand for the Hopper architecture with significant growth in the H200 offering during the quarter.

• The U.S. government has imposed new licensing requirements affecting exports to China and other regions for specific integrated circuit products.

• Both Hopper and Blackwell systems will be shipped in Q4 FY 2025 and beyond, despite certain supply constraints.

• Data Center compute revenue was $27.6 billion, up 132% from a year ago.

• Gross margins increased to 75.8% for the first nine months of fiscal year 2025 compared to 70.9% for the first nine months of fiscal year 2024, primarily due to higher mix of Data Center revenue.

• Research and development expenses increased by 48% for both the third quarter and first nine months of fiscal year 2025 compared to the same periods in fiscal year 2024.

• The company has expanded its Data Center product portfolio to include new solutions that do not require a license for export, which has contributed to growth in Data Center revenue in China.

• Macroeconomic factors, including inflation, interest rate changes, capital market volatility, global supply chain constraints, and geopolitical developments, may impact results of operations and demand for products.

• Repurchased 92 million and 254 million shares of common stock for $11.1 billion and $26.2 billion during the third quarter and first nine months of fiscal year 2025, respectively.

• Networking revenue was $3.1 billion, up 20% from a year ago, driven by Ethernet for AI.

• Gross margin increased year-over-year due to a higher mix of Data Center revenue.

• Entered into prepaid manufacturing and capacity agreements to enhance supply capabilities.

• Demand for Data Center systems has risen, driven by advancements in accelerated computing and generative AI models.

• On August 26, 2024, our Board of Directors approved an additional $50 billion to our share repurchase authorization, without expiration.

• 58% of total revenue for the third quarter of fiscal year 2025 came from sales to customers outside of the United States.

• USG announced export restrictions targeting China's semiconductor and supercomputing industries, affecting exports of certain chips and technologies.

• Dependence on consistent supply from overseas partners, particularly in Taiwan, poses a risk to business operations.

Nvidia (NVDA) - REVENUE BY PRODUCT

The time-series data for the category 'Revenue By Product' indicates significant fluctuations across various sectors. The 'Data Center' revenues exhibit a remarkable upward trend, particularly in recent periods with figures escalating to over $30 billion, suggesting aggressive growth and potential expansion in this sector. Conversely, 'Automotive' and 'OEM And Other' categories show more stable yet modest contributions with sporadic spikes, such as the noticeable increase to over $1 billion in the 'Automotive' category, followed by stabilization. 'Gaming' appears robust, consistently maintaining revenues in the billions. Although it experienced a peak, reaching over $4 billion, it also faced a subsequent decline. The 'Professional Visualization' segment has shown a mixture of growth, yet recently suffered a dip to around $200 million. In contrast, the 'Tegra Processor' revenues reveal fluctuating fortunes, highlighting areas that may require strategic review or investment. Collectively, these trends imply the necessity for targeted focus towards sustaining growth in high-performing divisions like 'Data Center,' and exploring potential innovations or investments in underperforming segments to optimize overall revenue performance.

Nvidia (NVDA) - REVENUE BY REGION

The dataset reveals diverse revenue trends across different regions, with significant fluctuations observed over time. Notably, the 'China Including Hong Kong' and 'Taiwan' categories exhibit substantial growth, peaking at values of 5.41 billion and 5.15 billion respectively, indicating strong market performance and potential areas for continued investment. The 'United States' region stands out with the highest recorded revenue of 14.8 billion, suggesting a robust demand and market presence. Meanwhile, 'Singapore' shows remarkable growth, escalating to 7.7 billion, which may reflect strategic market expansion or heightened consumer demand. 'Other Countries' recordings display inconsistency, hinting at potential volatility in these markets, while Europe and 'Other Americas' appear more stable with modest growth. For the company, these insights suggest prioritizing resource allocation towards high-performing regions such as the U.S., China, and Singapore, while exploring strategic initiatives to mitigate risks in more volatile areas.

Advanced Micro Devices (AMD) - RECENT EARNINGS BREAKDOWN

Key Highlights for their September, 2024 Quarter

• Net revenue for the three months ended September 28, 2024, was $6,819 million, an increase from $5,800 million in the same period in 2023.

• Net income for the three months ended September 28, 2024, was $771 million, compared to $299 million for the three months ended September 30, 2023.

• Net cash provided by operating activities increased to $1,742 million compared to $1,286 million in the prior year.

• Net cash provided by (used in) investing activities improved to $113 million from $(1,573) million year-over-year.

• Repayment of debt amounted to $750 million.

• Cash and cash equivalents at the end of the period totaled $3,897 million.

• Revenue recognized over time from custom products and development services accounted for 25% of revenue for the three months ended September 30, 2023.

• On August 9, 2024, the Company completed the acquisition of Silo AI Oy for $665 million, with a purchase consideration of $553 million allocated primarily to goodwill.

• On August 17, 2024, the Company entered into an agreement to acquire ZT Group Int’l, Inc. for approximately $4.9 billion, consisting of cash and stock.

• The ZT Systems acquisition is expected to close in the first half of 2025, pending regulatory approvals and customary closing conditions.

• The Company's purchases from the ATMP JV during the three months ended September 28, 2024 were $407 million, a decrease from $448 million during the same period in 2023.

• The Company's resales to the ATMP JV during the three and nine months ended September 28, 2024 were $33 million and $103 million, respectively, compared to $2 million and $5 million in the prior year.

• Net revenue for the three months ended September 28, 2024 was $6.8 billion, an 18% increase compared to the prior year period.

• During the three months ended September 28, 2024, the company returned $250 million to shareholders through stock repurchases.

• As of September 28, 2024, $4.9 billion remains available for future stock repurchases under the company's approved stock repurchase program.

• The Company entered into a one-year term loan agreement for $100 million to support the ATMP JV's general corporate purposes.

• Expectations regarding future AI trends and developments.

• Demand for AMD’s products is anticipated to remain strong.

• Anticipated ongoing and increased costs related to enhancing and implementing information security controls.

• Expectation that international sales will continue to represent a significant portion of total sales.

• Data Center segment revenue increased significantly due to strong ramp of AMD Instinct™ GPU shipments and growth in AMD EPYC™ CPU sales.

• Client segment revenue increased primarily due to strong demand for 'Zen 5' AMD Ryzen™ processors.

• Gross margin for the three months ended September 28, 2024 was 50%, up from 47% in the prior year period.

• Operating income for the three months ended September 28, 2024 was $724 million, compared to $224 million for the prior year period.

• Net income for the three months ended September 28, 2024 was $771 million, compared to $299 million for the prior year period.

• Completed the acquisition of Silo AI on August 9, 2024, an AI lab based in Finland, for $665 million.

• Entered into an agreement to acquire ZT Systems valued at approximately $4.9 billion, expected to close in the first half of fiscal year 2025.

• Data Center operating income was $1.0 billion for the three months ended September 28, 2024, up from $306 million for the prior year period.

• Client net revenue of $1.9 billion for the three months ended September 28, 2024 increased by 29%, up from $1.5 billion for the prior year period.

• Research and development expenses of $1.6 billion for the three months ended September 28, 2024 increased by $129 million, or 9%, compared to the prior year period.

• There is a significant opportunity in the AI market, but competition from companies like Nvidia and potential internal competition from customers may arise.

• The semiconductor industry is highly cyclical and has experienced severe downturns that could materially affect the business.

• Government incentives, such as the CHIPS Act, could benefit competitors and may not be available to the company.

Advanced Micro Devices (AMD) - REVENUE BY SEGMENT

The 'Revenue By Segment' data indicates distinct growth and regression patterns across different sectors. The 'Computing And Graphics' segment shows a steady upward trend, peaking at 2,802,000,000, suggesting robust demand or effective market penetration. 'Enterprise Embedded And Semi Custom' experienced significant fluctuations, with a notable surge to 5,800,000,000 indicating a possible large-scale contract or market expansion, although followed by variability, signaling potential instability or strategic adjustments. The 'Client' and 'Data Center' sectors generally showcase growth, with the latter peaking at 3,549,000,000. Meanwhile, the 'Gaming' sector reveals a declining trend, dropping from a high of 6,805,000,000 to 462,000,000, suggesting market saturation or increased competition. These trends highlight the need for the company to assess its growth strategies in the high-performing segments and address challenges in the declining 'Gaming' segment to maintain overall financial health and shareholder value.

Advanced Micro Devices (AMD) - REVENUE BY REGION

The dataset for 'Revenue By Region' reveals several notable revenue trends across different geographic locations. Japan and China exhibit substantial growth trajectories, with Japan's revenue peaking at 4,177 million and China leading all markets with 5,207 million, indicative of strong performance and market penetration in the APAC region. Europe and the United States show consistent increases, with the U.S. experiencing a particularly significant surge to 8,049 million, suggesting an expanding market or increased product adoption. Taiwan and Singapore also display healthy growth, although not as pronounced, while revenues from 'Other Countries' exhibit more moderate increases. These patterns underscore strategic opportunities for the company to leverage strong growth areas, particularly in Asia and the U.S., while potentially exploring further market development activities in Europe and other regions to maximize global revenue potential.

Intel Corp (INTC) - RECENT EARNINGS BREAKDOWN

Key Highlights for their September, 2024 Quarter

• Higher operating expenses primarily driven by increased investments in process technology.

• Net revenue for the three months ended Sep 28, 2024, was $13,284 million, a decrease from $14,158 million in the same period in the previous year.

• Net income attributable to Intel for the three months ended Sep 28, 2024, was a loss of $16,639 million, compared to a profit of $297 million in the same period last year.

• Restructuring and other charges significantly increased to $5,622 million for the three months ended Sep 28, 2024, from $816 million in the same period last year.

• Emphasis on AI strategy and future products, services, and technologies.

• In Q2 2024, closed a transaction with Apollo Global Management, selling 49% of interest in Ireland SCIP for net proceeds of $11.0 billion.

• The company has a commitment to fund its share of Arizona SCIP construction costs totaling $29.0 billion.

• In 2023, we closed agreements to sell a combined 32% minority stake in our IMS business, including a 20% stake to Bain Capital and a 10% stake to Taiwan Semiconductor Manufacturing Company.

• Total charges expected under the 2024 Restructuring Plan are approximately $3.0 billion, primarily cash settled in future periods.

• Established a valuation allowance of $9.9 billion as a discrete non-cash tax expense against US deferred tax assets.

• Net gains recorded for hedged investments in the third quarter of 2024 amounted to $406 million, compared to net losses of $329 million in the third quarter of 2023.

• A charge of $1.0 billion related to litigation involving VLSI has been accrued.

• A charge of $401 million related to an EC-imposed fine has been accrued.

• In September 2023, the EC imposed a €376 million ($401 million) fine against the company based on its 2009 finding that it made payments to prevent sales of specific rival products.

• Total Intel Products revenue was $12.2 billion in Q3 2024, a decrease from $12.4 billion in Q3 2023.

• Total Intel Products revenue for YTD 2024 was $35.9 billion, an increase from $33.8 billion in YTD 2023.

• Total Intel Products operating income increased to $9.6 billion in YTD 2024, up from $6.9 billion in YTD 2023.

• The operating margin for YTD 2024 was 27%, up from 20% in YTD 2023.

• Notebook revenue for YTD 2024 reached $14.0 billion, a 17% volume increase as inventory levels improved.

• In August 2024, Intel entered into three confidential agreements with R2, Third Point, and TRGP Capital, resulting in an aggregate payment of $780 million.

• A securities class action lawsuit was filed in the US District Court for the Northern District of California in May 2024 following the modification of the company's segment reporting to align with its new internal foundry operating model.

• Revenue in Q3 2024 was $3.3 billion, up $273 million from Q3 2023, driven by an increase in server revenue.

• Year-to-date 2024 revenue was $9.4 billion, up $298 million from YTD 2023, driven by an increase in server revenue.

• Revenue for Q3 2024 was $4.4 billion, a decrease from the previous year, driven by lower intersegment ASPs and back end services revenue.

• Higher server unit cost primarily driven by an increased mix of Intel 7 products totaled (192) million.

• Operating loss was $5.8 billion in Q3 2024, compared to an operating loss of $1.4 billion in Q3 2023.

• Operating loss was $11.1 billion in YTD 2024, compared to an operating loss of $5.6 billion in YTD 2023.

• Net loss attributable to Intel for Q3 2024 was $(16,639) million, versus $297 million in Q3 2023.

• YTD 2024 revenue was $38.8 billion, roughly flat with YTD 2023.

• Restructuring and other charges in Q3 2024 were $5,622 million, significantly higher than $816 million in Q3 2023.

• In Q3 2024, the company announced the 2024 Restructuring Plan to implement cost-reduction measures, including employee headcount reductions and cuts to operating and capital expenditures.

• The 2024 Restructuring Plan is expected to be substantially complete by the fourth quarter of 2025, aimed at reducing the cost structure while continuing investments in process and product leadership initiatives.

• Employee severance and benefit arrangements in Q3 2024 included charges of $2.2 billion related to the 2024 Restructuring Plan.

• Goodwill and acquired intangible assets experienced non-cash impairments of $2.9 billion in Q3 2024 and $3.1 billion in YTD 2024.

• Expect reductions in operating expenditures, capital expenditures, and cost of sales post-2024 Restructuring Plan.

• Board of Directors suspended quarterly dividends starting Q4 2024 to prioritize liquidity.

• Gross margin percentage decreased from 42.5% to 15.0% year-over-year.

• Net cash provided by (used for) operating activities decreased from $6,847 million to $5,123 million year-over-year.

Intel Corp (INTC) - REVENUE BY REGION

The data indicates varying revenue trajectories across different regions. China shows robust growth with revenues peaking at $21.14 billion, although there’s a noticeable dip to $17.13 billion, indicating potential market volatility. The United States displays a smoother upward trend, reaching a maximum of $16.57 billion despite a minor decline. Singapore initially shows a strong upward trend, but it faces a significant revenue drop in the final period to $9.66 billion, suggesting potential challenges in sustaining growth. Taiwan’s revenues exhibit fluctuations, with a peak of $13.46 billion followed by a decline, indicating potential instability. These trends suggest that while emerging markets like China and the U.S. offer growth potential, maintaining steady growth in Singapore and Taiwan might require strategic intervention and adaptability to market conditions. This analysis will be crucial for forecasting and resource allocation to maximize global revenue streams.

WORD FROM WIZ

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-Wiz

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