AMD reported its fourth quarter earnings after the bell on Tuesday, beating expectations on both revenue and profits. The chipmaker’s stock fell almost 9% before the market opened on Wednesday, despite stronger guidance.
The company’s data center business generated $3.9 billion in revenue for the quarter, slightly below analysts’ estimates of $4.09 billion. However, AMD’s earnings per share (EPS) of $1.09 beat expectations, with revenue coming in at $7.56 billion.
In the current quarter, AMD expects revenue between $6.8 billion and $7.4 billion, which is within analyst estimates. The company is also battling to take market share in the artificial intelligence space from rival Nvidia.
The stock’s decline can be attributed to the ongoing trade tensions with China, including a 10% tariff on goods made in the country. This may impact the broader electronics market, potentially slowing sales for chip manufacturers like AMD.
However, the recent tariffs are unlikely to have a significant impact on high-end chips manufactured outside of China. Instead, the company’s struggles in the AI space and competition from Nvidia may be driving the stock’s decline. Despite this, AMD has outperformed rival Intel, which has seen its shares fall 54% over the same period.
Source: https://finance.yahoo.com/news/amd-stock-slides-despite-q4-earnings-beat-strong-q1-forecast-212556424.html