Revenue in its data center business, which includes AI chips, surged 122% to $3.5 billion, topping estimates.
“AMD’s stock was priced for a beat and raise,” Summit Insights analyst Kinngai Chan saidGuoabong Stock. “Clearly, AMD’s (fourth-quarter) outlook was not good enough for investors.”Jaipur Investment
While AMD sees strong demand for its AI chips, it still trails front-runner Nvidia, which commands about 80% of the AI semiconductor market. AMD CEO Lisa Su said the company now expects to sell $5 billion worth of AI chips this year, up from $4.5 billion the company estimated earlier this year.
Analysts largely believe Nvidia will maintain its majority market share for the foreseeable future, owing in part to its entire AI ecosystem that includes the CUDA software and networking equipment.
Capacity for the production of AI chips will be very tight going into 2025, the world’s largest contract chip manufacturer TSMC said in July, marking a significant hurdle for the supply of these advanced semiconductors.
The company expects revenue of $7.5 billion, plus or minus $300 million for the fourth quarter, compared with analysts’ average estimate of $7.54 billion, according to data compiled by LSEGVaranasi Stock. AMD forecast an adjusted gross margin of roughly 54%, which met analyst expectations.
The company reported revenue of $6.82 billion for the third quarter, compared with estimates of $6.71 billion. AMD reported adjusted earnings of 92 cents a share, in line with analyst expectations.
AMD’s results weighed on the chip sector in extended tradingUdabur Investment. Arm Holdings fell 1.7%, Nvidia dropped 0.3%, Intel fell 0.4%. Chip equipment maker Lam Research fell 0.8%.
“Most investors, once they digest AMD’s good results combined with their lackluster forecast, will try to extrapolate what that means for the rest of the AI-chip and semiconductor market,” Running Point Capital chief investment officer Michael Schulman said.
(Reporting by Arsheeya Bajwa in Bengaluru and Max A. Cherney in San Francisco; Editing by Anil D’Silva and Lisa Shumaker)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.
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