AMD Declines As Macro Hurts PC Sales
Advanced Micro Devices (AMD:US) shares traded lower by about 7% on Wednesday after the chipmaker reported a 30% drop in quarterly shipments. Into the earnings report, analysts warned that the global PC maker is seeing a sharper-than-expected correction that is likely to continue for several quarters.
AMD posted a profit per share of 60 cents on revenue of $5.35 billion, slightly ahead of the Street at 56 cents on revenue of $5.3 billion. While Q1 results were better than expected, investors were disappointed to hear that Q2 revenue sees flat sales for the current quarter.
CEO Lisa Su said AMD expects to see “growth in the second half of the year as the PC and server markets strengthen.” Analysts were looking for $5.48 billion in Q2 revenue.
Compared to a year-ago period, AMD’s sales fell 9%, led by a 65% sales slump witnessed in the company’s client group.
“We believe the first quarter was the bottom for our client processor business,” Su said.
The data center business is seen continuing to grow in 2023 after generating $1.295 billion in Q1 sales.
AMD stock initially fell about 5% before extending a decline after Bank of America (BAC:US) analysts lowered their recommendation to Neutral as they see several headwinds facing the chip company going forward.
Despite this week’s drop in AMD stock, shares are still up nearly 30% year-to-date. Several Congress members, including Ro Khanna, Josh Gottheimer and John Curtis, all reported transactions centered around AMD shares in recent months.
