Advanced Micro Devices (AMD) reported weaker-than-expected sales of graphics processing units for artificial intelligence data centers, causing its stock to plummet 6.3%. Despite beating estimates on the top and bottom lines for the fourth quarter due to growth in mature PC and server businesses, AMD missed views for data center GPU sales.
The company predicted flat AI GPU sales sequentially in the first half of 2025 followed by growth in the second half of the year. However, its latest Q4 data indicates a different story, with $1.75 billion in sales, below estimates of about $2 billion.
Analysts have cut their price targets on AMD stock after the company’s report, citing challenges from Nvidia dominating the GPU market and competition from makers of application-specific integrated circuits like Broadcom (AVGO) and Marvell Technology (MRVL).
“We think it could be hard for AMD to ‘win’ the AI narrative despite the absolute AI growth rate,” said BofA Securities analyst Vivek Arya.
Source: https://www.investors.com/news/technology/amd-stock-craters-soft-ai-data-center-business