Weak AMD Reporting Causes Shares to Sell Off

Weak AMD Reporting Causes Shares to Sell Off

Investors began dumping shares of Advanced Micro Devices Inc en masse on Wednesday after its earnings report indicated the company was struggling with falling personal computer sales and failed to gain market share against larger competitor Intel Corp in the latest quarter. .

The stock fell nearly 8% in the first hours of trading, potentially equaling $9 billion in the company’s market value. Shares of Intel, whose prices rose last week thanks to more optimistic forecasts for the PC market, rose more than 2%.

“Even if Intel didn’t increase its share for this quarter, it seems unlikely that they lost their share,” wrote an analyst at Bernstein. Stacy Rasgon (Stacy Rasgon) in a note to clients.

“While we’ll see if Intel’s 2024 roadmap holds up, the competitive environment next year is likely to get tougher for AMD,” he added.

The PC market has been in decline over the past few quarters after a surge in demand during the coronavirus pandemic, while data center spending has also slowed due to the deteriorating economic situation.

AMD, whose smaller, more efficient data center chips helped it win market share from Intel last year, fell short of both PC and data center sales expectations in the first quarter.

The sales forecast for the current quarter also came in below market expectations, although the company was optimistic that the chip market would start to recover in the second half of 2023.

“AMD’s results were more vulnerable (to a downturn in the PC market) than Intel’s results because most AMD-based PC buyers were general consumers. In contrast, Intel has a significant share in the PC business segment,” said an analyst at Gartner. Mikako Kitagawa (Mikako Kitagawa).

However, some analysts believe that interest in artificial intelligence and the recovery in China are positive signals that could help the company.

“AMD is obviously not immune to the general fluctuations in the macro environment, but in our view, the share of the company it has earned through roadmap execution and product performance will last through the turmoil in the first half of 2023 before giving way to strong momentum in the second. half of 2023,” brokerage TD Cowen said in a statement.

Be the first to read breaking news on OopsTop.com. For today’s latest news, and live news updates read the most reliable English news website Oopstop.com

Leave a Reply