Advanced Micro Devices’ (AMD) stock is down 10% after the chipmaker missed analyst estimates for sales in its key data centre segment.
The Silicon Valley-based company managed to report fourth-quarter 2024 financial results that topped Wall Street expectations for sales and earnings.
AMD, as the company is known, announced earnings per share (EPS) of $1.09 U.S., which narrowly beat the $1.08 U.S. consensus expectation among analysts.
Revenue in the period totaled $7.66 billion U.S., which was above the $7.53 billion U.S. forecast on Wall Street.
However, the company’s all-important business making microchips for use in data centres posted sales that missed estimates.
AMD announced $3.86 billion U.S. in data centre sales, which was up 69% from a year earlier. Unfortunately, analysts had forecast $4.14 billion U.S. in data centre sales during the quarter.
For all of 2024, AMD’s revenue from its data centre division grew 94% to $12.60 billion U.S. AMD said that $5 billion U.S. of those sales were from microchips that power artificial intelligence (A.I.).
The company categorizes its microchips for personal computers and laptops as “client revenue.” That segment increased 58% on an annual basis to $2.3 billion U.S.
AMD is also the second-largest producer of chips for video game consoles, behind market leader Nvidia (NVDA).
Revenue in the gaming segment fell 59% to $563 million U.S., continuing a years long decline for the unit. The company’s embedded chips division reported $923 million U.S. in sales, down 13% year-over-year.
Looking ahead, AMD said it expects $7.1 billion U.S. in sales for the current first quarter, plus or minus $300 million U.S. Analysts expected AMD to guide for Q1 2025 revenue of $7 billion U.S.
Prior to today (Feb. 5), AMD’s stock had declined 31% over the last 12 months to trade at $119.50 U.S. per share.
