AMD

AMD stock wobbles on weak Q4 outlook and AI chip guidance for 2024

California-based chipmaker AMD (Advanced Micro Devices) announced its third-quarter earnings on Tuesday, surpassing analysts' expectations, though the company’s forecast for 2024 was softer than anticipated.

Here's how AMD's performance compared to the LSEG (formerly Refinitiv) consensus estimates for the quarter ending in September:

  • Earnings per share (EPS): 70 cents (adjusted) vs. 68 cents (expected)
  • Revenue: $5.8 billion vs. $5.7 billion (expected)

For Q4 2023, AMD anticipated close to $6.1 billion in sales, while a FactSet survey of analysts had projected revenue of $6.37 billion.

AMD stands out as one of the few chip manufacturers capable of producing high-end graphics processing units (GPUs) required for training and deploying generative artificial intelligence models — a market primarily dominated by Nvidia. According to a report by CNBC, AMD has confirmed that its upcoming AI chips, the MI300A and MI300X, are progressing as planned and are set for volume production in the current quarter.

“There is a lot of interest in MI300,” AMD’s CEO Lisa Su said on the earnings call, referring to the company’s accelerator product. “We will start, let’s call it, more concentrated in cloud, [with] sort of several large hyperscalers, but we’re also very engaged across the enterprise and there’s a lot of interest.”

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AMD share price: Stock drops after earnings call, recovers on GPU commentary

During a conference call with investors and analysts, AMD’s CEO Lisa Su said that AMD anticipates data center GPU products to bring in close to $400 million in revenue for the fourth quarter and exceed $2 billion by 2024.

Following the report, AMD shares initially dropped by as much as 5% during late trading. However, they later recovered some of their losses after the company provided guidance for its data center GPU business. The stock ended the after-hours session down by 0.3% at $98.22.

As of market close on Tuesday, AMD shares had declined by 14% over the past three months. During the same period, the iShares Semiconductor ETF, which tracks the performance of the ICE Semiconductor Index, fell by 17%.

One of AMD's main rivals, Intel, recently announced that the substantial stockpiles of PC chips, which accumulated during the pandemic, were gradually returning to regular levels. Intel stock surged by close to 10% after it reported earnings and issued a forecast that exceeded Wall Street’s expectations.

AMD share price forecast: Analysts rate AMD stock a Strong Buy, see 30% potential upside

The consensus rating on AMD stock, as cited by TipRanks based on 29 surveyed analysts, was Strong Buy as of November 1.

According to the website, the average AMD share price forecast stood at $131.29, representing a 33.29% potential upside from the closing price on October 31.

At the time of writing on Wednesday, AMD stock was mostly flat in premarket trading at $98.5, as per MarketWatch data.


Risk Warning and Disclaimer: This article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform. Trading Contracts for Difference (CFDs) involves high leverage and significant risks. Before making any trading decisions, we recommend consulting a professional financial advisor to assess your financial situation and risk tolerance. Any trading decisions based on this article are at your own risk.

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