Advanced Micro Devices (AMD) reported impressive financial results for the fourth quarter, surpassing Wall Street expectations and guiding for even higher prospects in the upcoming quarter. Despite these positive numbers, AMD’s stock experienced a decline in after-hours trading.
The company’s adjusted earnings came in at $1.09 per share, with total sales reaching $7.66 billion for the quarter that ended in December. Analysts had anticipated earnings of $1.08 per share on sales of $7.53 billion. Year-over-year, AMD’s earnings surged 42%, while revenue rose by 24%.
For the first quarter of the new year, AMD forecasts sales of $7.1 billion, exceeding Wall Street’s prediction of $7 billion. CEO Lisa Su emphasized the significance of 2024 for AMD, highlighting that the year marked a milestone with record annual revenue and robust earnings growth. Additionally, the Data Center segment showed impressive growth, almost doubling in annual revenue as the adoption of Epyc processors gained traction. AMD also noted over $5 billion in revenue from its AMD Instinct accelerators.
After initially rising in after-hours trading, AMD’s stock fell over 5% to approximately $112.50 after closing the regular session at $119.50, reflecting some investor caution despite the strong earnings report.
AMD remains a formidable competitor against Intel in the PC and server markets, and against Nvidia in the AI accelerator and graphics chip sectors. In comparison, Intel reported diminishing results last week, showing a 76% decline in earnings year-over-year, which further underscores AMD’s strong performance within the semiconductor industry.
AMD currently ranks 16th among 39 stocks in the fabless semiconductor sector, with an IBD Composite Rating of 63 out of 99, indicating a competitive position in the market.
As technological advancements continue to advance, AMD is poised to leverage its strong product lineup and growing demand for high-performance computing, suggesting a promising outlook for future growth.
In summary, while the immediate stock response may seem unfavorable, AMD’s strong earnings growth and optimistic forecast point to a resilient position in a competitive market, potentially paving the way for continued success in the coming years.