AMD's revenue and earnings beat Wall Street's expectations. Why did the stock fall then?

Advanced Micro Devices, a manufacturer of AI chips, gaming video cards and PC processors, has given a revenue forecast for the current quarter, which did not suit all investors, Bloomberg reports. The company said that revenue in the fourth quarter will be about $9.6 billion. The average estimate of analysts was $9.2 billion, but some forecasts reached $9.9 billion, the agency notes.

Investors made big bets on AMD after high-profile deals with OpenAI and Oracle, which plan to use the company's chips to create AI infrastructure. However, the forecast published on the evening of November 4 indicates that the effect of these contracts may not manifest itself as quickly as the market had hoped, Bloomberg writes.

After the publication of the reports, AMD shares were down 3% to $242.2 on the postmarket. AMD shares also fell by 3.7% on the main trading floor amid a sell-off in technology stocks due to investors' concerns about the overvaluation of AI-related companies.

- Third-quarter revenue rose 36% to a record $9.2 billion, exceeding the average estimate of analysts: according to Bloomberg, they expected $8.7 billion. The third-quarter results exclude revenue from shipments of AMD Instinct MI308 GPUs to China, the company said in a report.

- Sales in the data center segment rose 22% to $4.3 billion, compared to the average forecast of $4.14 billion.

- Revenue from sales of PC components and gaming graphics cards increased 73% to $4 billion, well above the consensus forecast of $2.6 billion, with gaming segment revenue growth of 181% year-on-year. The company notes an increase in demand for Radeon gaming graphics cards.

- Adjusted earnings amounted to $1.2 per share. Analysts had forecast $1.17, according to data compiled by Bloomberg.

This article was AI-translated and verified by a human editor