AMD stock rose on Wednesday after the chipmaker reported stronger-than-expected data center chip sales in the fourth quarter. But advanced micro devices (AMDThat news was tempered by soft guidance for the current period.
The Santa Clara, California-based company said late Tuesday that it earned 69 cents adjusted per share on sales of $5.6 billion in the December quarter. Analysts polled by FactSet expected AMD earnings of 67 cents per share on sales of $5.51 billion.
On a year-over-year basis, AMD’s profits are down 25% while sales are up 16%. The Xilinx acquisition boosted revenue and helped offset declining computer and game chip sales.
In the fourth quarter, AMD’s PC chip sales fell 51% year-over-year to $903 million amid weak PC demand. Gaming segment revenue fell 7% to $1.6 billion.
Meanwhile, data center chip sales increased 42% to $1.7 billion, driven by Epyc server processors.
AMD shares rose after the release of the report
For the current quarter, AMD expected sales of $5.3 billion, down 10% year-over-year. Analysts were looking at $5.5 billion in the first quarter.
In morning trading on stock market todayAMD stock jumped 7%, to 80.42. During the regular session on Tuesday, AMD stock rose 3.7%, closing at 75.15.
“Although the demand environment is mixed, we are confident in our ability to gain market share in 2023 and drive long-term growth based on our premium product portfolio,” said CEO Lisa Su. New release.
Wall Street is divided on the news
AMD’s Q4 report provided something for the bulls as well as the bears. At least three Wall Street analysts have raised their price targets on AMD stock while three others have lowered their targets.
AMD expects the PC market to slow in the first quarter. The company also sees cloud computing customers working to absorb chip inventory in the first half of the year.
AMD hopes to counteract headwinds in the overall market by taking share from competitors Intel (INTC). But analysts say these efforts are likely to cut the company’s profit margins.
AMD stock ranks 12th out of 34 stocks in IBD’s fabless semiconductor industry group, according to IBD stock check. She has up to it IBD composite classification Out of 72 out of 99. The composite rating scores key growth metrics for a stock versus all other stocks regardless of industry group.
Follow Patrick Seitz on Twitter at @employee For more stories on consumer technologies, software and semiconductor stocks.
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