AMD Beats Q4 Expectations, But Stock Falls After Hours
Advanced Micro Devices (AMD) reported its fourth quarter earnings after the bell on Tuesday, exceeding expectations on both revenue and earnings. The company's Q1 forecast also surpassed analysts' estimates.
Financial Highlights:
* Earnings per share: $1.09, beating expectations of $1.09
* Revenue: $7.56 billion, exceeding estimates of $7.5 billion
* Data center revenue: $3.9 billion, slightly below expectations of $4.09 billion
* Client segment revenue: $2.3 billion, surpassing expectations of $1.98 billion
* Gaming revenue: $563 million, outperforming estimates of $487 million
Outlook:
For the current quarter, AMD anticipates revenue between $6.8 billion and $7.4 billion, slightly lower than Wall Street's estimate of $7.0 billion.
Market Competition and Challenges:
AMD faces intense competition in the AI space from Nvidia (NVDA), which dominates sales of high-powered AI chips. Additionally, the company is navigating a slowdown in PC sales despite industry efforts to promote AI PCs.
Impact of Tariffs:
President Trump's 10% tariff on goods made in China could potentially affect the electronics market, including servers and PCs. AMD's high-end chip market is expected to be minimally impacted as most manufacturing occurs outside of China.
Stock Performance:
Despite the positive earnings report, AMD stock fell over 3.5% in after-hours trading. This reflects the company's challenges in the competitive AI market and the potential impact of tariffs.