AMD Delivers Mixed Q3 Results, Light Guidance; Stock Sinks

AMD's Revenue Falls Short of Expectations

AMD reported mixed financial results for the third quarter of 2023, with revenue falling short of analysts' expectations. The company's revenue came in at $5.6 billion, a 16% increase year-over-year but below the consensus estimate of $5.8 billion.

The decline was primarily driven by weakness in the PC market, where AMD's Ryzen processors have faced competition from Intel's latest Alder Lake and Raptor Lake chips. Additionally, the company's Radeon graphics cards have also faced challenges due to the ongoing supply chain disruptions and the declining demand for crypto mining hardware.

Data Center and Embedded Businesses Continue to Grow

Despite the challenges in the PC market, AMD's data center and embedded businesses continued to grow in Q3. The data center business grew by 45% year-over-year, driven by strong demand for AMD's EPYC processors. The embedded business also grew by 33% year-over-year, driven by demand for AMD's products in a variety of end markets, including automotive, industrial, and medical.

AMD CEO Lisa Su said in a statement that the company is "pleased with the continued growth of our data center and embedded businesses." She also noted that the company is "making progress in addressing the supply chain challenges that have impacted our PC and graphics businesses."

Light Guidance for Q4

AMD provided light guidance for the fourth quarter of 2023, projecting revenue in the range of $5.5 billion to $5.6 billion. This is below the consensus estimate of $5.9 billion, as investors remain concerned about the impact of the ongoing PC market weakness on AMD's business.

In a research note, Susquehanna Financial Group analyst Christopher Rolland wrote that "AMD's guidance for Q4 was weaker than expected, which is likely to weigh on the stock in the near term."

Stock Sinks on Mixed Results

AMD's stock price fell by more than 5% in after-hours trading following the release of its Q3 results. The stock has now lost more than 50% of its value in 2023 as investors have grown increasingly concerned about the impact of the PC market weakness on the company's business.