Advanced Micro Devices (AMD) reported its third-quarter earnings late Tuesday, successfully meeting Wall Street’s expectations amid strong sales performance. However, the company’s revenue forecast for the upcoming quarter was slightly lower than anticipated, which resulted in a decline in its stock during after-hours trading.
For the quarter ending in September, AMD reported an adjusted earnings of 92 cents per share on revenues of $6.82 billion. These results aligned with analysts’ forecasts, who had estimated earnings of 92 cents per share on sales of $6.71 billion. Year over year, AMD experienced a 31% increase in earnings and an 18% rise in sales.
Looking ahead, AMD anticipates revenues of $7.5 billion for the current quarter, reflecting a 22% growth compared to last year. However, this estimate falls slightly short of Wall Street’s prediction of $7.55 billion for the fourth quarter.
In a statement, Chief Executive Lisa Su highlighted the achievements of the third-quarter results, attributing the record revenue to strong sales of Epyc and Instinct data center products as well as a robust demand for Ryzen PC processors. She expressed optimism about future growth opportunities in the data center, client, and embedded businesses, driven by a growing demand for computational power.
Recently, AMD unveiled new AI data center processors along with updated PC and server chips, including the AMD Instinct MI325X AI accelerators and fifth-generation Epyc server CPUs.
Despite the positive earnings, AMD’s stock saw a decline in after-hours trading, dropping over 7% to $154.21 after a robust 4% increase during regular trading hours, closing at $166.25.
AMD remains a strong competitor in the semiconductor industry, ranking eighth out of 39 stocks in its sector, according to IBD Stock Checkup, and holding an IBD Composite Rating of 88 out of 99.
In summary, while AMD demonstrated strong financial performance and promising growth potential, the tempered revenue guidance raised concerns among investors, leading to a drop in stock price. However, the company’s strategic advances in AI and data center technologies may well position it for continued success in the evolving tech landscape.
This article reflects AMD’s resilience as it navigates competitive pressures while striving for innovation—an encouraging sign for investors looking for long-term growth in the semiconductor sector.