AMD in the Tension Field of Market Forecasts: Profit-Taking Despite Strong Growth

The chip giant AMD has caused a stir with its recent quarterly figures. While the company met expectations regarding earnings per share for the third quarter and even slightly exceeded them in terms of revenue, the forecast for the fourth quarter prompted cautious reactions on Wall Street. AMD forecasts revenue between $7.2 billion and $7.8 billion, whereas analysts had averaged expectations of $7.55 billion. As a result of the skeptical market reactions, AMD's stock price fell by more than 5%. The reason for the concern is a looming slowdown in growth in the field of artificial intelligence. Nevertheless, CEO Lisa Su remains optimistic and sees great growth opportunities in the areas of data centers, client, and embedded systems, driven by the insatiable demand for computing power. In the third quarter, AMD posted an adjusted earnings per share of $0.92 with revenue of $6.8 billion. This exceeded analysts' expectations of $6.7 billion, although earnings per share were as predicted. For comparison, in the same quarter of the previous year, earnings per share were $0.70 and revenue was $5.8 billion. The main revenue drivers were the data center business with $3.5 billion and the client segment, which brought in $1.9 billion. The gaming segment was less favorable, which plunged 69% to $462 million as demand for Radeon graphics cards and console chips significantly declined following their pandemic-driven peak. Despite the challenges, AMD remains innovative and recently introduced upcoming chip models, including the 5th generation EPYC processor and the Instinct MI325X AI chip. Compared to the previous year, AMD's stock price has increased by 65%, far outperforming the S&P 500 and significantly overshadowing the declining trend of competitor Intel. However, competitor Nvidia remains the undisputed leader in the AI chip business with an impressive increase of 246%.