AMD just reported Q3 earnings. Here’s why the stock is falling. (update)
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AMD (NASDAQ:AMD) shares fell 7% in extended trading on Tuesday after the semiconductor giant reported third-quarter results and provided guidance for the fourth quarter.
For the period ending September 28, AMD said it earned $0.92 per share as revenue rose 18% year-over-year to $6.82B. Included in that was strength in the company’s data center segment, which rose a record 122% year-over-year $3.5B, thanks to the company’s AI processors.
The client segment — which includes PC processors — also saw strength, as sales for the segment rose 29% year-over-year to $1.9B.
Conversely, AMD saw trouble in its gaming and embedded segments, as revenue fell 69% year-over-year to $462M and 25% year-over-year to $927M, respectively.
A consensus of analysts expected AMD (AMD) to earn $0.92 per share on $6.71B in revenue during the period.
“We delivered strong third quarter financial results with record revenue led by higher sales of EPYC and Instinct data center products and robust demand for our Ryzen PC processors,” said AMD Chair and CEO Dr. Lisa Su. “Looking forward, we see significant growth opportunities across our data center, client and embedded businesses driven by the insatiable demand for more compute.”
AMD (AMD) said it expects to report revenue between $7.2B and $7.8B for the fourth-quarter, with the midpoint of $7.5B, slightly below the $7.55B that analysts were expecting.
Other chip companies such as Nvidia (NVDA) and Marvell (MRVL) shares fell after the results were released.
AMD management provided additional color on its conference call, telling investors that it expects data center GPU revenue to top $5B, up from a prior outlook of $4.5B.
The company also said that it believes it gained share in the server CPU market, citing wins from enterprises such as Meta (META).
(This story has been updated to include comments from the earnings call.)