Advanced Micro Devices (AMD) reported stronger-than-expected quarterly results but gave cautious guidance that sent its stock tumbling over 17% on the day. The company posted EPS of $1.53 on revenue of $10.3 billion, beating Bloomberg estimates of $1.32 and $9.6 billion.
Revenue was $7.7 billion in the same quarter last year. AMD said first-quarter revenue would come in between $9.5 billion and $10.1 billion.
The guidance topped the Street’s $9.4 billion estimate but missed some loftier forecasts. (Ed. note: some forecasts had called for over $10 billion.)
“Our AI business is accelerating, with the launch of MI400 series and Helios representing a major inflection point for the business as we deliver leadership performance and [total cost of ownership] at the chip, compute tray, and rack level,” “Based on the strength of our EPYC and Instinct roadmaps, we are well-positioned to grow data center segment revenue by more than 60% annually over the next three to five years and scale our AI business to tens of billions in annual revenue in 2027.” said Lisa Su.
JPMorgan analyst Harlan Sur called the report “a mixed bag.” He questioned AMD’s ability to generate operating leverage, cited the upcoming MI450 ramp as a margin risk, and kept a neutral rating with a $270 price target.
Bank of America analysts said AMD remains relatively under-owned, held by just two of ten investors, and underweighted at 0.16x relative to the S&P 500. Several analysts had expected a stronger outlook amid rising AI spending and large data center buildouts.
