AMD's Data Center Segment Earnings Fall Short of Expectations... 4% Drop in After-Hours Trading

American semiconductor company AMD, regarded as a 'rival to Nvidia,' saw its data center semiconductor sales fall short of market expectations, causing its stock to drop 4% in after-hours trading.

Reuters Yonhap News

On the 4th (local time), AMD announced that it recorded $7.66 billion (11.1322 trillion KRW) in revenue and an adjusted earnings per share (EPS) of $1.09 (1,585 KRW) for the fourth quarter of last year.

The revenue exceeded the Wall Street consensus estimate of $7.53 billion compiled by market research firm LSEG, and the EPS also surpassed the expected $1.08. However, the total net income for the fourth quarter was $482 million, significantly down from $667 million a year earlier.

So far, AMD has been recognized as a strong competitor to Nvidia, the leader in the field, as data center AI chip sales have surged amid the artificial intelligence (AI) boom. In this earnings report, data center segment revenue reached $3.86 billion, accounting for slightly more than half of the total. Although this represents a 69% increase year-over-year, it fell short of Wall Street's estimate of $4.14 billion.

Revenue from chips for personal computers, including PCs and laptops, rose 58% year-over-year to $2.3 billion.

Lisa Su, AMD's Chief Executive Officer (CEO), emphasized during a conference call with investors after the earnings announcement, "We expect double-digit revenue and EPS growth this year," adding, "Our plans for AMD's future accelerator chips are progressing well. Customer interest is also strong."

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