- Instruments
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Advanced Micro Devices Inc. (AMD) reported fourth quarter adjusted earnings per share (EPS) of $0.77, matching analysts’ estimates. The company reported a strong quarter with $6.2 billion in revenue, exceeding consensus estimate of $6.13 billion. Earnings rose 12% on a year-over-year basis, while revenue climbed 10%.
Guidance disappointed as AMD provided a weak revenue forecast for its March
quarter but raised its sales forecast of artificial intelligence (AI) chips
this year to over 3.5 billion, up from a previous forecast of $2 billion.
That figure came below previous analysts’ projections for the AI segment
between $4 billion and $8 billion, and disappointed investors as the stock
valuation is pegged to those figures.
Source: Investor Relations, Advanced Micro Devices, Inc.
AMD CEO Lisa Su said that the company could sell more than the $3.5 billion worth of AI chips that it is now forecasting once more capacity comes online in the second half of the year. The new MI300X – a graphics-processing unit designed to support generative artificial intelligence technologies is a new launch against NVIDIA’s ability to meet the global surge in demand.
The chip maker expects its first-quarter revenue to be about $5.4 billion, plus minus $300 million. The guidance is up from $5.35 billion during the same period last year but is well below the $5.77 billion consensus estimates. Weakness in videogaming chips, PC, servers, and programmable processors, which are core markets weighed on the forecast. The weaker guidance renewed concerns that customers are holding off on purchases in AMD’s core markets. The company did not provide earnings per share guidance.
AMD expects sales in its data canter segment to be flat sequentially in the first quarter and sees a strong ramp up of its data centre graphics processing units (GPUs) offsetting a seasonal decline in server sales. The company also predicts sequential sales declines in its client, embedded and gaming segments, and sees revenue from semi-custom chips declining by a double-digit percentage.
Overall, AMD delivered record data centre segment annual revenue and strong top-line and bottom-line growth in the last quarter of 2023, which was driven by the ramp of Instinct AI accelerators and strong demand for Epyc server CPUs .
Source: TradingView
Advanced Micro Devices share price has surged 117% in 2023 and is up 19% YTD; however, the price fell more than 6% after the results and we see a good probability of the decline extending further in the short-term. The company had little margin for error amid lofty expectations and investors were disappointed with the forward guidance provided for the current quarter.
Nonetheless, we see the current pull back as temporary, and we consider the short-term weakness as a good entry point. The price structure and the momentum conditions remain constructive at this juncture in time, and we see levels in the range between $190.00 – $200.00 as achievable over the long-term.
Overall, the company is making the best it can of a challenging market amid mixed demand environment and we are encouraged by the ongoing customer traction in the data centre GPU business.
Active traders looking to gain exposure the Advanced Micro Devices share price may consider Leverage Shares +3x Long AMD and -1x Short AMD ETPs.
Footnotes:
Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.
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If you are not classified as an institutional investor, you will be categorised as a private/retail investor. At this time, we cannot send communications directly to private/retail investors. You are welcome to view the contents of this website.
If you are an ‘Institutional investor’, you affirm either that you are a Per Se Professional Client, or that you wish to be treated as an Eligible Counterparty Client, both as defined under the Markets in Financial Instruments Directive, or an equivalent in a jurisdiction outside the European Economic Area.
Risk Warnings
The value of an investment in ETPs may go down as well as up and past performance is not a reliable indicator of future performance. Trading in ETPs may not be suitable for all types of investor as they carry a high degree of risk. You may lose all of your initial investment. Only speculate with money you can afford to lose. Changes in exchange rates may also cause your investment to go up or down in value. Tax laws may be subject to change. Please ensure that you fully understand the risks involved. If in any doubt, please seek independent financial advice. Investors should refer to the section entitled “Risk Factors” in the relevant prospectus for further details of these and other risks associated with an investment in the securities offered by the Issuer.
This website is provided for your general information only and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any investment.
Nothing on this website is advice on the merits of any product or investment, nothing constitutes investment, legal, tax or any other advice nor is it to be relied on in making an investment decision. Prospective investors should obtain independent investment advice and inform themselves as to applicable legal requirements, exchange control regulations and taxes in their jurisdiction.
This website complies with the regulatory requirements of the United Kingdom. There may be laws in your country of nationality or residence or in the country from which you access this website which restrict the extent to which the website may be made available to you.
United States Visitors
The information provided on this site is not directed to any United States person or any person in the United States, any state thereof, or any of its territories or possessions.
Persons accessing this website in the European Economic Area
Access to this site is restricted to Non-U.S. Persons outside the United States within the meaning of Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”). Each person accessing this site, by so doing, acknowledges that: (1) it is not a U.S. person (within the meaning of Regulation S under the Securities Act) and is located outside the U.S. (within the meaning of Regulation S under the Securities Act); and (2) any securities described herein (A) have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction and (B) may not be offered, sold, pledged or otherwise transferred except to persons outside the U.S. in accordance with Regulation S under the Securities Act pursuant to the terms of such securities. None of the funds on this website are registered under the United States Investment Advisers Act of 1940, as amended (the “Advisers Act”).
Exclusion of Liability
Certain documents made available on the website have been prepared and issued by persons other than Leverage Shares Management Company. This includes any Prospectus document. Leverage Shares Management Company is not responsible in any way for the content of any such document. Except in those cases, the information on the website has been given in good faith and every effort has been made to ensure its accuracy. Nevertheless, Leverage Shares Management Company shall not be responsible for loss occasioned as a result of reliance placed on any part of the website and it makes no guarantee as to the accuracy of any information or content on the website. The description of any ETP Security referred to in this website is a general one. The terms and conditions applicable to investors will be set out in the Prospectus, available on the website and should be read prior to making any investment.
Leverage Investment
Leverage Shares exchange-traded products (ETPs) provide leveraged exposure and are only suitable for experienced investors with knowledge of the risks and potential benefits of leveraged investment strategies.
Cookies
Leverage Shares Management Company may collect data about your computer, including, where available, your IP address, operating system and browser type, for system administration and other similar purposes (click here for more information). These are statistical data about users’ browsing actions and patterns, and they do not identify any individual user of the website. This is achieved by the use of cookies. A cookie is a small file of letters and numbers that is put on your computer if you agree to accept it. By clicking ‘I agree’ below, you are consenting to the use of cookies as described here. These cookies allow you to be distinguished from other users of the website, which helps Leverage Shares Company provide you with a better experience when you browse the website and also allows the website to be improved from time to time. Please note that you can adjust your browser settings to delete or block cookies, but you may not be able to access parts of our website without them.
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