Amd Forecasts Q4 Revenue Below Estimates Raises 2024 Ai Chip Forecast To 5 Billion

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AMD forecasts Q4 revenue below estimates, raises 2024 AI chip forecast to $5 billion
AMD forecasts Q4 revenue below estimates, raises 2024 AI chip forecast to $5 billion from

AMD Predicts Q4 Revenue Shortfall, Projects $5 Billion AI Chip Revenue for 2024

Key Points

AMD's Q4 Revenue Outlook

Advanced Micro Devices (AMD) has forecasted its fourth-quarter revenue to fall short of analysts' estimates. The company anticipates revenue to range between $5.3 billion and $5.6 billion, below the consensus estimate of $5.84 billion. This shortfall is primarily attributed to weaker-than-expected demand for its Ryzen processors and Radeon graphics cards.

AMD's Q4 performance reflects the broader slowdown in the PC market. According to IDC, global PC shipments declined by 28.1% year-over-year in Q3 2022, marking the steepest decline in nine years. The economic downturn and reduced consumer spending have significantly impacted PC sales.

Despite the disappointing Q4 revenue outlook, AMD remains optimistic about its long-term prospects. The company expects a rebound in PC demand in the second half of 2023, driven by the launch of its new Ryzen 7000 series processors and Radeon RX 7000 series graphics cards.

AMD's AI Chip Ambitions

AMD is doubling down on its artificial intelligence (AI) chip business. The company has raised its 2024 AI chip revenue forecast to $5 billion, up from its previous estimate of $4 billion. This reflects AMD's confidence in the growing demand for AI chips, driven by the proliferation of AI applications in various industries.

AMD's AI chips are designed to accelerate AI workloads, including machine learning, deep learning, and data analytics. The company is targeting the rapidly growing market for AI chips, which is expected to reach $63.2 billion by 2026. AMD is well-positioned to capitalize on this growth, given its strong portfolio of AI chips and its partnerships with major cloud providers.

The strong demand for AI chips stems from the increasing adoption of AI in various sectors, including healthcare, finance, and manufacturing. AI is transforming industries by automating tasks, improving decision-making, and driving innovation. This has led to a surge in demand for AI chips that can handle the massive computational requirements of AI algorithms.

Conclusion

AMD's Q4 revenue shortfall is a reflection of the challenging economic environment and weak PC demand. However, the company's long-term prospects remain strong, driven by its AI chip business. AMD is well-positioned to benefit from the growing demand for AI chips and is expected to generate significant revenue in this market in the coming years.