AMD tumbles after giving disappointing views of AI growth

On By Littum

(Bloomberg) – Advanced Micro Devices Inc. Tumbled in late trade after giving a disappointing prospect of its data center business, an area where it is struggling to catch up with AI computer leader Nvidia Corp.

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The department will grow by a percentage in the “strong” double digits this year, AMD said on a conference call with analysts and predicted the second half would be better than the first. But in an industry that has seen Nvidia’s sales double in each of the past two years, it wasn’t enough to impress investors.

Shares of the chipmaker slipped more than 8% in extended trade after the report was released. The share had already fallen 1.1% this year through Tuesday’s end.

Although AMD’s total quarter of total revenue topped estimates and it provided a solid forecast for the current period-oversized data center numbers the other results.

The report renewed concern that AMD’s push into AI equipment has lost some speed – confirming fears of analysts and investors. This feeling was stooked in recent weeks upon arrival of a Chinese start -up with a cheaper approach.

Revenue in the Data Center -Division was $ 3.86 billion over the fourth quarter. It jumped 69% from a year earlier, but analysts had projected $ 4.09 billion. On average, analysts predict that the device will generate $ 18.4 billion in 2025. That would be a 46% growth from 2024.

Although AMD won market share from Intel Corp. In personal computers and servers last quarter, this area is less of a growth driver. PC chips brought in $ 2.3 billion in revenue last quarter and topped the $ 1.99 billion estimate.

AMD is trying to persuade some of the largest companies in the world to include its AI products in their data center extension plans. It still plays with nvidia in this endeavor. Although AMD now generates more than $ 5 billion in annual revenue from accelerator chips that help develop AI models, NVIDIA’s sales exceed in this category $ 100 billion a year.

AMD’s total revenue in the fourth quarter rose 24% to $ 7.66 billion and topped the $ 7.54 billion estimate. Earnings per Stock was $ 1.09 minus certain items in line with predictions.

Total sales will be $ 6.8 billion to $ 7.4 billion in the current quarter, AMD said. Analysts are estimated on average $ 7.04 billion.