Key facts
- AMD shares fell 7.4% pre-market, wiping an estimated $61.1 billion from its market value.
- The company forecast Q3 revenue of approximately $13 billion, surpassing analyst estimates of $12.52 billion.
- AMD's data-center revenue more than doubled to $6.72 billion.
- CEO Lisa Su projected data-center revenue to more than double by 2027 and total revenue growth above 35%.
Advanced Micro Devices (AMD) shares fell pre-market on Wednesday as its revenue forecast, while stronger than expected, did not meet the high expectations of investors seeking clearer signs of accelerated growth from the AI spending boom. The stock was down 7.4% at $480.28, poised to reduce AMD's market value by approximately $61.1 billion.
This decline highlights the significant pressure on AMD to challenge Nvidia's dominance in the AI chip market amidst increasing competition from Intel. Analysts noted that expectations for AMD had likely risen following Intel's recent positive results, and the market already held a bullish outlook on AMD.
AMD forecast third-quarter revenue to be around $13 billion, with a margin of error of $300 million, surpassing the analyst consensus of $12.52 billion. Investors have more than doubled AMD's stock value this year, anticipating its emergence as a key alternative to Nvidia for AI chips, thereby setting a high benchmark for quarterly performance.
CEO Lisa Su indicated that AMD anticipates its data-center revenue will more than double by 2027 and projected overall revenue growth exceeding its previous target of over 35%. The company's data-center revenue already more than doubled to $6.72 billion, exceeding expectations. AMD recently secured deals with Anthropic and Core Scientific to advance its AI infrastructure initiatives.