NVIDIA Corporation (NASDAQ: NVDA) stock dropped 4% during intraday trading on Wednesday, a reaction to subdued guidance from its rival AI chipmaker, Advanced Micro Devices (NASDAQ: AMD), which left investors disappointed.
Advanced Micro Devices (NASDAQ: AMD) met Wall Street’s earnings target for the first quarter. However, its sales fell slightly short of expectations. The company’s sales outlook for the current quarter was roughly in line with estimates, but investors were anticipating a more significant boost from the company’s MI300 AI accelerator business.
AMD raised its 2024 revenue target for the MI300 to “at least $4 billion,” up from $3.5 billion. Nevertheless, many analysts and investors were hoping for more optimistic guidance, with expectations ranging from $4.5 billion to $5 billion for the product. Some even had optimistic forecasts targeting over $6 billion in MI300 sales for the year.
The underwhelming guidance from AMD prompted a reaction from Wall Street, with at least 12 analysts cutting their price targets on AMD stock following the company’s Q1 report.
Consequently, AMD stock plummeted by 8.9% to close at $144.27, amplifying the broader negative sentiment in the semiconductor sector and contributing to the decline observed in NVIDIA’s stock during Wednesday’s trading session.
NVIDIA (NASDAQ: NVDA) Stock Reaction
NVDA stock fell 3.89% to close at $830.41 on Wednesday. Its value has risen by 4.22% this week. Trading activity has witnessed 55,986,316 (55.98 million) shares changing hands, above the average daily volume of 54.02 million.
Edward Cooke is a financial analyst, freelance writer, and editor. He has six years of experience in financial journalism. He has an in-depth understanding of equities markets, tracking major indices and providing real-time analysis on stock price movements, corporate earnings, and market sentiment.
