Advanced Micro Devices (NASDAQ: AMD) stock plunged 9% in intraday trading Wednesday, as investors reacted to the chipmaker’s underwhelming full-year revenue outlook for its data center GPU segment, overshadowing quarterly results that largely met Wall Street expectations.
During the earnings call, AMD CEO Lisa Su revealed that the company forecasts full-year data center GPU revenue to surpass $4 billion. While this outlook exceeded AMD’s previous guidance of $3.5 billion, some investors had anticipated a more substantial upward revision, leading to disappointment.
For the current quarter, AMD forecasted net sales of $5.7 billion, plus or minus $300 million, roughly aligning with Visible Alpha’s estimate of $5.71 billion. This projection represents approximately a 6% increase from last year’s equivalent quarter.
For the first quarter, AMD reported adjusted earnings of 62 cents per share, slightly ahead of analysts’ expectations of 61 cents per share. Revenue for the period totaled $5.47 billion, marginally surpassing the consensus view of $5.46 billion and marking a 2% increase from the previous year.
Notably, data center revenues surged by 80% year-over-year in the quarter, driven by robust sales of AMD’s MI300 chips designed for artificial intelligence (AI) data centers. AMD disclosed that prominent MI300 customers include Microsoft (MSFT), Meta (META), and Oracle (ORCL), with sales of the chips surpassing $1 billion since their launch in the final quarter of the previous year.
However, the chipmaker showed a mixed performance in other segments, with an 80% year-over-year increase in client segment revenue partially offsetting a 48% decline in gaming sales amid lower chip revenue for game consoles.
Advanced Micro Devices (NASDAQ: AMD) Stock Reaction
AMD stock plummeted 8.91% to close at $144.27 on Wednesday. Its value has dropped by 4.92% this week. Trading activity has witnessed 88,893,298 (88.89 million) shares changing hands, well above the average daily volume of 66.29 million.
Zabih Ullah is a seasoned finance writer with more than ten years of experience. He is highly skilled at analyzing market trends, decoding economic data, and providing insightful commentary on various financial topics. Driven by his curiosity, Zabih stays updated with the latest developments in the finance industry, ensuring that his readers receive timely and relevant news and analysis.
