AMD disappoints investors with AI chip sales, but forecast tops estimates
Advanced Micro Devices failed to impress investors waiting for the chipmaker to gain ground against AI heavyweight Nvidia, even as its quarterly results and revenue outlook exceeded analyst estimates on Tuesday.
Shares of the Santa Clara, California-based company fell about 5 per cent in extended trading. AMD’s shares fell about 18 per cent last year, in contrast to larger rival Nvidia’s rise of more than 171 per cent.
The chipmaker has been struggling to keep up with demand for its advanced processors that power complex AI systems for Microsoft, Meta Platforms and other customers.
AMD reported fourth-quarter data center revenue of $3.9 billion, which missed the consensus estimate of $4.15 billion. The company’s data center segment contains revenue from its line of AI chips that competes with Nvidia’s.
For 2024, AMD said it generated more than $5 billion of AI chip revenue.
Summit Insight analyst Kinngai Chan, said :
AMD’s AI GPU is probably not tracking to investors’ expectations. We continue to believe Nvidia is opening a gap against AMD in AI GPU performance and value,
AMD customers for its AI chips are tech giants such as Microsoft and Meta, which are increasingly dedicating resources to developing their own silicon for processing large data volumes required by GenAI.
Microsoft and Meta unveiled new AI chip versions last year, casting doubt on AMD’s ability to compete in a race to dominate AI infrastructure.
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AMD disappoints investors with AI chip sales, but forecast tops estimates, source
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