AMD, AI Chip Division Posts Strong Results Despite Tepid Market Response

Stock Price Plummets 7% in After-Hours Trading

[Image source=Reuters Yonhap News]

'NVIDIA Challenger' US semiconductor company AMD announced AI chip segment results that exceeded market expectations, but its stock price plunged more than 7% in after-hours trading. Despite the surge in sales, the market consensus was that AMD is still far from catching up to NVIDIA, which is dominating the AI chip market.

On the 29th (local time), AMD announced that its Q3 revenue increased by 18% year-on-year to $6.82 billion. This exceeded the average estimate of $6.71 billion. Earnings per share (EPS) were 92 cents, in line with market expectations.

Notably, revenue from the data center segment, including AI chips, rose sharply by 122% year-on-year to $3.5 billion, attracting attention. However, compared to NVIDIA’s data center revenue, which reaches hundreds of billions of dollars, AMD’s is only about one-eighth. AMD expects to generate over $5 billion in revenue this year from AI accelerators, surpassing its previous forecast of $4.5 billion, but some analysts believe a larger increase is necessary.

Additionally, AMD forecasted approximately $7.5 billion in revenue for Q4, which falls short of Wall Street’s average estimate of $7.55 billion. Furthermore, AMD estimated that its adjusted gross margin for Q4 would miss expectations. Bloomberg added, "This shows that AMD is growing more slowly in the AI chip sector than initially anticipated."

AMD’s stock price closed up 3.96% on the day, but after the forecast was released, it dropped 7.63% in after-hours trading. Meanwhile, AMD CEO Lisa Su rebutted concerns during the post-earnings conference call that AMD is not achieving sufficient growth in the AI chip field. She emphasized, "AMD is increasing production and gaining the trust of large data center companies that rely on AI accelerators."

This content was produced with the assistance of AI translation services.