Advanced Micro Devices, Inc. AMD shares were seen sharply lower in premarket trading after the chipmaker's first-quarter results failed to strike a chord with investors.
The Santa Clara, California-based company reported first-quarter earnings and revenue that went past muted consensus expectations. Revenue and earnings per share came in at $5.35 billion and $0.60, respectively, ahead of the consensus estimates of $5.30 billion and $0.57 per share.
Investors are worried about the sharp plunge in client revenue and operating income from the data center business. Data center revenue held flat year-over-year, as cloud strength offset lower enterprise revenue.
As most Wall Street analysts predicted, AMD issued a below-consensus revenue forecast for the second quarter. The company guided to revenue of $5.3 billion, plus or minus $300 million, compared to the Street forecast of $5.49 billion.
AMD is optimistic about performance going forward. Chief Financial Officer Jean Hu said she is confident in growth in the second half of the year, as the PC and server markets strengthen and new products ramp up.
Following the first-quarter print, KeyBanc Capital Markets analyst John Vinh maintained an Overweight rating and a $110 price target. "While 2Q guidance is disappointing, we’re encouraged with the 2H outlook, which implies Genoa issues have been resolved and MI300 is expected to contribute meaningfully," she said.
In premarket trading on Wednesday, AMD stock fell 5.97% to $84.54, according to Benzinga Pro data. Key downside supports levels to watch out for are $83.6 (intraday low hit in late April) and $71.60 (intraday low from early July 2022).
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