NEW YORK: Advanced Micro Devices (AMD) Inc, the main challenger to Nvidia Corp in the market for artificial intelligence processors, gave a disappointing forecast for the current period, a sign it’s not making the kind of artificial intelligence (A)I inroads that some investors anticipated.
First-quarter sales will be roughly US$9.8bil, plus or minus US$300mil, the company said in a statement Tuesday.
Analysts had estimated US$9.39bil on average, but some projections topped US$10bil, according to data compiled by Bloomberg.
In a mixed blessing, AMD said that it has begun selling one of its older chips to China. That added to sales – and suggested that the company is navigating trade restrictions – but weighed on profit margins.
The outlook let down investors who had hoped to see a bigger payoff from AI computing spending.
AMD is still playing catch-up with Nvidia in this lucrative market, but the chipmaker has said that a new more powerful design – due in the second half of the year – will give it an advantage.
The shares fell more than 5% in late trading after the results were released. They had been up 13% this year through Tuesday’s close.
Fourth-quarter sales rose 34% to US$10.3bil, beating a US$9.7bil average estimate. Profit was US$1.53 a share, minus certain items.
Analysts projected US$1.32 on average, according to data compiled by Bloomberg.
AMD’s data centre business, the main beneficiary of AI spending, rose 39% to US$5.38bil in the period.
Analysts had predicted US$4.97bil on average. Personal computer-related sales rose 34% to US$3.1bil. The average prediction was US$2.89bil.
Like Nvidia, AMD is contending with US restrictions on what it can export to China – the world’s biggest market for chips.
President Donald Trump recently moved to relax the curbs, but it’s taken time to get the needed licenses from the Department of Commerce.
The company generated US$390mil of revenue last quarter from shipping older-generation MI308 chips to Chinese customers. It expects about US$100mil of such sales in the current period. — Bloomberg
