by Chavi Mehta and Stephen Nellis
(Reuters) – Advanced Micro Devices said on Tuesday it expects fourth-quarter revenue and net margin to fall short of Wall Street estimates, citing weakness in the video game market and weaker demand from some industries. using its programmable chips.
The title of the group based in Santa Clara, California, was down more than 4% in after-hours trading.
This announcement comes as AMD has developed a semiconductor called MI300X with the ambition of competing with Nvidia in the market for chips used by artificial intelligence (AI) data centers in order to create technologies similar to ChatGPT.
The company has previously told investors to expect sales of these chips to reach $300 million in the last quarter of 2024, an announcement seen by some analysts as a signal that the MI300X would not be ready as planned for the end of the year.
If the PC market is recovering, demand for programmable chips, used in particular by the health sector, automobiles and wireless communications, has slowed, weighing on AMD’s forecasts for the current quarter.
Analysts also believe that the US administration’s recent expanded measures on semiconductor exports to China will force AMD to apply for licenses to sell its most sophisticated AI chips to Beijing, which the group plans to launch in December. .
Furthermore, the cuts decided by Meta Platforms, a key customer of AMD, in its investment spending, could also weigh on the semiconductor manufacturer.
Over the October-December period, AMD anticipates revenue of around $6.1 billion, compared to a consensus of $6.37 billion according to LSEG data.
The group forecast an adjusted gross margin of 51.5%, slightly below analysts’ average estimate of 52.1%, according to LSEG data.
In the third quarter, AMD recorded adjusted revenue up 4% to $5.8 billion, compared to a consensus of $5.7 billion.
Adjusted earnings came in at 70 cents per share, compared with analysts’ average forecast of 68 cents per share, according to LSEG data.
Revenue from its data center division remained almost stable in the July-September period, at $1.6 billion, while sales from the client division, which includes the PC market, grew 42%. at $1.5 billion.
(Reporting Chavi Mehta in Bangalore and Stephen Nellis in San Francisco; French version Jean Terzian)
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