Shares of Advanced Micro Devices (NASDAQ: AMD) took a hit today after the chipmaker reported disappointing results and guidance in its first-quarter earnings report. The stock was down 7.3% as of 2:44 p.m. ET, following an earlier drop of 10% in the session.
In its earnings report, AMD met estimates but failed to provide a more bullish forecast on AI chips, which investors were hoping for. The company expects to sell $4 billion worth of AI chips this year, falling short of industry leader Nvidia. Despite reporting a 2% increase in revenue to $5.47 billion and adjusted earnings per share of $0.62, ahead of estimates by a penny, AMD is still facing challenges in the semiconductor sector.
While the data center and PC/Client segments showed strong growth, sales in gaming and embedded segments were down significantly. For the second quarter, AMD forecasts revenue of $5.7 billion, a 4% improvement from the first quarter and up 6% from the same quarter last year.
The decline in AMD stock today may be attributed to the high expectations surrounding AI chips, as the stock had seen significant gains earlier in the year. Despite the setback, AMD still holds potential in the AI market, as evidenced by its growth in data center revenue.
Investors considering investing in Advanced Micro Devices should weigh their options carefully. The Motley Fool Stock Advisor analyst team recently identified the 10 best stocks for investors to buy now, and AMD did not make the cut. The service has a track record of outperforming the S&P 500 since 2002, providing investors with valuable insights and stock picks.
In conclusion, while AMD may be facing challenges in the short term, its long-term potential in the AI market could still be promising. Investors should carefully consider their options before making any investment decisions in the company.
