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Advanced Micro Devices beat Wall Street expectations for profits and sales by a small margin, and the company’s stock price fell sharply in after-hours trading.
Advanced Micro Devices, Inc. (AMD) logo displayed on a smartphone with an AI chip and symbol … (+)
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important facts
According to FactSet, AMD reported third-quarter 2024 earnings per share of $0.92 and revenue of $6.8, meeting analyst consensus estimates of $0.92 and $6.7 billion, respectively. .
AMD stock briefly rose ahead of the earnings release, but fell more than 6% in after-hours trading.
The company’s revenue increased 17% from last year’s $5.8 billion. The numbers were driven primarily by record data center revenues, including sales of server microprocessors and graphics processing units.
AMD’s stock price has more than doubled since the beginning of 2023 to around $155, largely due to increased demand for AI chips and processors, and AMD has established itself as a competitor to Nvidia. “Recent next-generation announcements do not appear to have effectively closed out the stock,” Bernstein analysts wrote ahead of the earnings, “but there is a gap with what Nvidia is offering.” Masu.
Main background
The earnings announcement follows the company’s Advancing AI event earlier this month, where AMD announced a new generation of AI chips but did not announce any new large-scale customers. AMD’s biggest customers include Microsoft, Google, and Meta, which will add to their cloud computing businesses and AI models in 2023 as part of the search for cheaper alternatives to Nvidia’s chips. Started using AI chips. The AI chip market could reach annual sales of $400 billion over the next five years, with Nvidia reportedly currently holding about 70% to 95% market share.
Forbes rating
AMD Chairman and CEO Lisa Su has an estimated net worth of $1.1 billion, according to Forbes’ real-time tracker. More than half of her fortune is tied up in AMD stock, which has soared nearly 40 times since Su took over as CEO in 2014 thanks to the generative AI boom. Tuesday’s gains increased her net worth by $29 million before market close. Sue was ranked 27th on this year’s list of America’s Self-Made Women.
important quotes
“AI is clearly a top priority for us as a company, and we’ve really leveraged all of our internal development capabilities to do that,” Su said in June.
Read more
Why AMD spent $665 million to acquire a small AI research team (Forbes)
