AMD has released its latest quarterly results. The company expects revenue for the current quarter to be between $5.4 billion and $6 billion, which is in line with Wall Street estimates. Despite this, AMD’s stock price fell by more than 9% on Wednesday morning. This indicates concerns about AMD’s future AI development.
Analysts expect slower growth
Vivek Arya, an analyst at Bank of America, lowered his price target for AMD stock from $195 to $185. Arya pointed out that the forecast for MI300 chips in 2024 is $4 billion. Although this is an increase from the previous forecast of $3 billion, it fell short of more optimistic expectations of $5 billion to $6 billion.
Stock losses indicate broad market uncertainty
On Wednesday, AMD mirrored the stock losses of other chip makers. Super Micro Computer (SMCI) fell by more than 17%. The Philadelphia Semiconductor Index fell by more than 2.5% throughout the day. This indicates a general weakening of investor enthusiasm for AI trading, particularly for companies that experienced strong stock gains over the past year.
Long-term challenges for chip makers like AMD in the AI market
Citi analyst Drew Pettit told Yahoo Finance that companies in the chip sector will face challenges this quarter. Pettit emphasized that companies need to not only meet expectations but also show a significant increase and long-term confidence in their future prospects to overcome market volatility.
