AMD forecast tops first-quarter revenue estimates

By Max A. Cherney, Arsheeya Bajwa

(Reuters) -Advanced Micro Devices forecast first-quarter revenue above Wall Street estimates on Tuesday, betting on strong demand for its AI chips as Wall Street’s technology heavyweights build infrastructure to dominate the emerging technology.

Shares of the Santa Clara, California-based company fell more than 2.8% in extended trading. AMD’s shares fell about 18% last year, in contrast to larger rival Nvidia’s rise of more than 171%.

The chipmaker has been struggling to keep up with demand for its advanced processors that power complex AI systems for Microsoft, Meta Platforms and other customers.

AMD reported fourth-quarter data center revenue of $3.9 billion, which missed the consensus estimate of $4.15 billion. The company’s data center segment contains revenue from its line of AI chips that competes with Nvidia’s.

For 2024, AMD said it generated more than $5 billion of AI chip revenue.

It has also benefited from a push by businesses to reduce their dependence on Nvidia, whose more expensive chips dominate the market for AI processors.

The company expects revenue of about $7.1 billion, plus or minus $300 million in the first quarter, compared with analysts’ average estimate of $6.99 billion, according to data compiled by LSEG.

AMD – one of the largest providers of personal computer chips – is also likely to benefit from improving demand from a wave of consumers and businesses buying new PCs that can handle generative AI tasks, after a prolonged slump.

Adjusted for stock-based compensation, among other things, AMD reported fourth-quarter per-share profit of $1.09, compared with a consensus estimate of $1.08. AMD reported revenue of $7.66 billion for the fourth quarter, compared with estimates of $7.53 billion.

(Reporting by Arsheeya Bajwa in Bengaluru and Max A. Cherney in San Francisco; Editing by Maju Samuel and Matthew Lewis)