Shares of Advanced Micro Devices (AMD) are down 8% after the microchip designer issued financial results that were inline with Wall Street forecasts and provided weak forward guidance.
AMD, as the company is known, reported earnings per share (EPS) of $0.92 U.S., which matched the consensus forecast of analysts.
Revenue in the quarter totaled $6.82 billion U.S., which was ahead of the $6.71 billion U.S. that was expected on Wall Street.
AMD said its data centre business, which includes the processors it makes to power artificial intelligence (A.I.) applications and models, doubled in sales for a second consecutive quarter.
However, the company’s forward guidance disappointed both analysts and investors.
AMD said it expects $7.5 billion U.S. in sales for the current fourth quarter, which is inline with consensus expectations of $7.54 billion U.S. in sales.
The new guidance represents a 22% year-over-year decline in revenue for the final quarter of the year.
AMD remains the second-largest developer of graphics processing units (GPUs) that are used in data centres to train and run generative A.I. models, behind Nvidia (NVDA).
The company said that it expects $5 billion U.S. in A.I. microchip sales this year, up from a previous forecast of $4.5 billion U.S.
In October, AMD introduced a new artificial intelligence chip called the MI235X and said that orders for the new processor have been strong.
AMD’s A.I. microchip sales are reported in its data centre segment, which more than doubled on an annual basis to $3.5 billion U.S. during this year’s third quarter.
Overall data centre revenue in Q3 was up 122% from a year ago. AMD’s gross margin expanded to 54%, which the company said was due to higher A.I. chip sales.
Weighing on AMD’s results have been sales of its microchips that are used in video game consoles and personal computers (PCs).
AMD reported that sales of its gaming and PC processors declined 68% year-over-year in Q3, due to a drop in demand for custom chips found in consoles such as the PlayStation.
Before today (Oct. 30), AMD’s stock had gained 20% this year to trade at $166.25 U.S. per share.
