AMD Stock Price Starts Falling after 150% Surge in 12 Months

UTC by Osaemezu Ogwu · 2 min read
AMD Stock Price Starts Falling after 150% Surge in 12 Months
Photo: AMD / Instagram

AMD revenue jumped 50% to $2.13 billion in Q4, which is higher than analysts’ estimates of $2.11 billion. However, the Q1 revenue estimate is rather disappointing.

Santa Clara-based multinational semiconductor company, Advanced Micro Devices Inc (AMD) first-quarter estimate of revenue has raised a lot of eyebrows as it came in far below the estimates of analysts. Such a situation is a result of declining demand from gaming console makers despite its data center and PC chips business tracking a revival in the chip industry. It has become known from the reports of January 28, 2020.

AMD saw its stock price decline as much as 4% after the company announced fiscal fourth-quarter earnings that slightly surpassed analysts’ estimates on Tuesday. During the last 365 days, the stock has risen over 150%, becoming the top gainer on the S&P 500 Index .SPX as well as the Philadelphia Semiconductor Index .SOX within the period.

According to a statement, the company’s revenue accelerated by 50% on a yearly basis in the quarter that ended on December 28. The revenue for the 2019 fiscal year was $6.73 billion. It has been confirmed that the revenue in the last quarter surged to $2.13 billion from $1.42 billion, surpassing analysts’ estimates of $2.11 billion. Moreover, apart from items, the firm earned 32 cents per share, beating estimates of 31 cents.

Commenting on the development, Senior Research Analyst at Summit Insights Group, KinNgai Chan, noted:

“The secular decrease in the game console semi-custom chip (SoC) should have been anticipated. I think investors desired to witness a steeper growth profile from its datacenter, CPU business to offset the near-term gaming SoC decline.”

Serious Pressure

Pressure has mounted on the console business as inventory is drawn down before Microsoft Corp. (MSFT.O) and Sony Corp. (6758.T) inaugurating their new gaming consoles in the second half of this year. Fourth-quarter sales in its venture, lodged and semi-custom segment, which also contains chips used in consoles, grew 7% to $465 million but failed to reach FactSet estimates of $603.8 million.

Meanwhile, speaking about PC chip business on a conference call with analysts on Tuesday, AMD CEO Lisa Su said:

“We’ve been on the steady growth in market share now for the last eight quarters, and we believe we acquired a share in Q4 as well.”

AMD continues to dominate the headlines with its exploits in the technology world. On December 19, 2019, Coinspeaker reported that the company has joined hands with Ultra Games to put efforts behind co-marketing activities and to promote the Ultra platform while creating awareness of the benefits of blockchain-based gaming.

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