AMD’s Q1 2023 report did not meet investors’ expectations

AMD, a leading electronics manufacturer, lost over 7% following the report for the first quarter of 2023. The company’s revenue was $5.4 billion, which is 9% less than last year. However, the forecast for the second quarter anticipates revenue growth due to the demand for computers and the increase in demand for AI. Keep an eye on AMD’s stock dynamics, as an interesting entry point may be near.

AMD’s Q1 2023 report

The AMD company’s report for Q1 2023 did not meet investors’ expectations, leading to a 7.8% drop in the company’s stock. However, some revenue indicators exceeded market expectations. For example, the company’s earnings per share were $0.6, which is 11.8% higher than expected.

However, the company’s revenue decreased by 9% to $5.4 billion. This is due to low demand for computers and a large inventory on hand, which resulted in a 64% drop in revenue in the consumer segment.

The company expects the situation to improve in Q2 thanks to the beginning of recovery in consumer demand for computers and increased demand from companies involved in artificial intelligence. The forecast for Q2 assumes revenue in the range of $5 to $5.6 billion.

The decline in revenue in the consumer and gaming segments was partially offset by growth in revenue from the data center segment. Revenue from this segment increased to $1.295 billion. “Our strategically important data center and embedded system segments accounted for over 50% of revenue in the first quarter,” said the company’s CFO.

AMD expects further revenue growth from data centers in Q2, but a decrease in revenue from gaming and embedded systems segments. The company also expressed confidence in its growth in the second half of the year, thanks to strengthening PC and server markets, as well as expanding new products.

Table of key data from AMD’s Q1 2023 report:

Revenue$5.4 billion
Revenue decline-9%
Consumer segment revenue decline-64%
Earnings per share$0.6
Earnings per share decline-11.8%
Net loss$139 million
Gaming segment revenue$1.76 billion
Data center segment revenue$1.295 billion
Q2 revenue forecast$5 – $5.6 billion

Despite the decline in revenue, AMD can expect future demand for its products due to the boom in neural networks and artificial intelligence. The company expects the beginning of a recovery in consumer demand for computers this quarter and demand for AMD’s products (processors, graphics accelerators, etc.) from companies involved in AI. The data center segment accounted for over 50% of revenue in the first quarter, and the company expects further revenue growth from data centers in the second quarter. Overall, the high growth potential in the future, associated with neural networks and AI, may lead to an increase in demand for AMD’s products.

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