AMD stock reacts to Q1 sales guidance - Yahoo Finance

Shares of chipmaker Advanced Micro Devices (AMD) are in the red Wednesday morning after reporting first-quarter sales guidance alongside its fourth-quarter earnings results. From the floor of the New York Stock Exchange, Yahoo Finance Reporter Madison Mills examines why AMD stock may be under pressure while unveiling a new line of chips.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

SEANA SMITH: Shares are sinking in premarket trading off just about 4%. The company giving sales expectations for the first quarter that fell short of what the street had anticipated. The chip maker though did give an upbeat forecast for its AI chips. Madison Mills standing by on the floor of the New York Stock Exchange with the latest on the move to the downside, Maddie, that we're seeing in the stock this morning.

MADISON MILLS: Yeah, good forward guidance for AMD but not good enough. They updated their AI chips revenue forecast for 2024 to 3.5 billion from 2 billion. The street was looking for 6 billion, so a tripling of that forecasted revenue.

But that's not a crazy anticipation given some of the revenue forecasting that we've seen from other chips players in the space. Think about, obviously, NVIDIA, a huge competitor to an AMD and even Intel coming out with that record breaking earnings print last week.

And that's gonna add a little bit of pressure to a name like AMD, which analysts this morning telling me it was already priced in. The upside to this name that we got from that earnings print was already priced in. We've seen a doubling in this stock just over the past quarter. It's up 26% year to date. So the street was looking for a little bit more good news in that earnings picture than they got yesterday.

Now, having said that, they have this new product, right? It's the MI300X chip. It's a GPU that you're gonna be using for that AI play there. The big customers for this chip are Microsoft, Oracle, and Meta.

And we're not gonna see the revenue from that product until the second half of this year. So that could be a good indicator for this name heading into the latter half of 2024 that they're gonna have a little bit more upside. But again, if we look at the stock today, not a lot of upside. They're seeing a lot of red, not just with AMD but across the big tech sector as well.

SEANA SMITH: All right, Maddie. Thanks so much. We have been talking about that here this morning, Brad. When we talk about the fact that these lofty expectations, so much hype going into many of these AI names. It's already been priced in. If they miss on any metric or fall short or really fail to significantly surpass those expectations, we're seeing that reflected in the stock price.

Adblock test (Why?)