(Updated - November 1, 2023 6:17 AM EDT)
Investing.com – Advanced Micro Devices (NASDAQ:AMD) reported a weaker-than-expected current quarter that overshadowed third-quarter results that beat Wall Street estimates.
Advanced Micro Devices (AMD) shares fell more than 2% in pre-market Wednesday trade following the report.
AMD reported adjusted EPS $0.70 on revenue of $5.80 billion. Analysts polled by Investing.com anticipated EPS of $0.68 cents on revenue of $5.7 billion.
Looking ahead, the company guided fiscal fourth-quarter revenue of $6.1B, give or take $300 million, an increase of about 9% year-on-year. That compared with estimates for $6.4B.
On the earnings call, CEO Lisa Su said the company expects AI GPU sales to top $2 billion in 2024. For Q4, Data Center GPU revenue is expected to be about $400 million.
"This growth would make MI300 the fastest product to ramp to $1 billion in sales in AMD history," Su said to analysts on the call.
HSBC analysts said the earnings were in line with expectations while the company's Q4 outlook was "muted."
"Despite our bullish view on MI300, we think upside in MI300 will not be sufficient to offset potential downside in overall non-AI severs, embedded, and gaming, resulting in neutral risk-reward," analysts said.
BofA analysts also reaffirmed a Neutral rating as they believe current valuation reflects AI opportunity.
"We like AMD’s computing neighborhood, management execution, solid start to generative AI inference ($2bn in CY24E) and continued optionality, and server share gains versus Intel (NASDAQ:INTC). However, AMD’s $1.6bn in incremental AI sales next year is largely offset by a similar combined decline in embedded (-20% YoY) and gaming (-8% YoY) segments," they clarified.
Additional reporting by Senad Karaahmetovic