Feb 5 – Following its Q4 2024 earnings report, which consists of mixed results, Advanced Micro Devices (AMD, Financial) shares witnessed a more than 9% decline in its premarket trading on Wednesday. AMD recorded $7.66 billion in total revenue with $1.09 in adjusted EPS for Q4 2024, while its data center segment brought in $3.86 billion instead of the forecasted $4.14 billion despite robust AI chip sales.
CEO Lisa Su addressed the company’s stellar results from their client business, which has become epochal in 2024 because gross margins were at 51% and operating margins doubled from the previous year. Data center development is something that the market is apprehensive about due to the reduced projection values for the segment by financial institutions such as Cantor Fitzgerald, Bank of America, HSBC, and Goldman Sachs. Surviving stock prices are down 9%, and the 5% rise to initial post-hours trading times was followed by market volatility.
It seems like the market shows doubt regarding Advanced Micro Device’s long-term success because of the dominant competition from NVIDIA (NVDA, Financial) and Intel (INTC, Financial). Market performance of the stock indicates investors remain concerned about the company’s single-segment business exposure despite promising strategic initiatives by the semiconductor giant.
This article first appeared on GuruFocus.
