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AMD Shares Dip Despite Strong AI Revenue Forecast
5 Aug
Summary
- AMD's stock declined, losing approximately $61.1 billion in market value.
- The company forecast Q3 revenue of about $13 billion, exceeding estimates.
- Investors seek clearer signs that AI spending will drive faster growth.
Advanced Micro Devices (AMD) experienced a pre-market share decline on Wednesday, resulting in an estimated loss of $61.1 billion in market value. This movement highlights the considerable expectations placed on AMD as it contends with Nvidia's dominance in the AI chip market, amid increasing competition from Intel.
The company projected third-quarter revenue to be approximately $13 billion, plus or minus $300 million, surpassing analysts' average estimates of $12.52 billion. This forecast came despite significant investor enthusiasm, which had more than doubled AMD's stock value earlier in the year.
CEO Lisa Su indicated that AMD anticipates its data-center revenue to more than double by 2027 and projected overall revenue growth exceeding its prior target of over 35%. Last month, AMD secured deals with Anthropic and Core Scientific to strengthen its AI infrastructure capabilities. Analysts from TD Cowen described AMD's performance and outlook as "objectively good" but noted the stock faced a "very high bar" due to recent AI-related announcements and its substantial rally.
