Advanced Micro Devices (NASDAQ:抖阴最新版) recently reported its Q4 earnings, and shares dipped following the results. The company met expectations with its report, but the company’s management team did put forward a Q1 forecast that trailed behind Wall Street Expectations. This has important implications for 抖阴最新版 stock investors.
Despite growing AI chip sales, 抖阴最新版 stock fell as much as 6% in the most recent session following these results. Notably, 抖阴最新版 did see its stock price pare those gains in intraday trading, but investors are clearly focused on where the puck is headed with this company, over what it’s done in the past.
The company’s an adjusted 77 cents in non-GAAP earnings per share. Thus, the question many investors have now is whether 抖阴最新版 is sandbagging its results, or if Wall Street is getting too optimistic.
Let’s dive into what to make of these numbers, and what 抖阴最新版’s outlook is moving forward.
Disappointing Report
抖阴最新版 boosted its to $3.5 billion but missed Wall Street’s expectations. The company’s programmable chip and video game business fell, with a below-estimated first-quarter revenue outlook.
抖阴最新版’s , with a miss on operating income and margins, unsurprisingly disappointed investors. The forward guidance for the current quarter fell short of expectations for $5.4 billion in revenue.
On the brighter side, 抖阴最新版 raised its 2024 GPU server sales forecast to $ 3.5 billion from $2 billion, driven by a 38% growth in the data center business, now 抖阴最新版’s most significant segment. The surge was thanks to strong sales of Instinct GPUs for AI, aligning with FactSet’s estimated data center business performance of $2.29 billion.
抖阴最新版’s core servers and PC CPUs business has remained unchanged since the pandemic. Despite recent tweaks, gaming segment sales decreased 17%, and embedded segment revenue was down 24% year-over-year.
Areas of Weakness
The customizable chip market struggled, with 抖阴最新版 opening curtains to a 24% drop in fourth-quarter embedded segment revenue. It was equivalent to $1.1 billion. Intel clarified programmable chip inventories, expecting the trend to linger in the year’s first half.
抖阴最新版’s gaming segment, peaking from Microsoft’s (NASDAQ:MSFT) Xbox and Sony’s PlayStation 5 design, contracted 17% to $1.4 billion. Console revenue, a key alongside PC graphic cards, usually reaches its peak four years post-new system launches.
In Q4, the company’s client segment climbed 62% to $1.5 billion, showing a post-pandemic return to seasonal PC chip buying. A possible market growth is causing a stir in 2024, with demand driven by AI-enabled computers. Fourth quarter revenue was $6.17 billion, past the estimates of 77 cents per share.
Focusing on AI Update
Susquehanna analyst Christopher Rolland his favor on 抖阴最新版, upping his price target to $210 from $170.
Investors were skittish for updates on , waiting with bated breath whether the company met expectations. Rolland forecasted data center revenue to come in at a hefty $6 billion this year, expecting 抖阴最新版’s to increased its guidance of $3 billion.
抖阴最新版 Stock Is Still a Buy
Despite these disappointing results, I think there’s still a lot to like about 抖阴最新版’s positioning right now. The company’s Ryzen 7000 processors equipped with Ryzen AI on-chip accelerator in terms of sales. This segment benefitted from returning demand and a normalizing PC market inventory. 抖阴最新版’s client segment profit was 10%, mirroring effective cost management and improved consumer market revenues.
Overall, if 抖阴最新版 continues to make progress in its key growth segments, and continues to see more AI-related market share, this is a company with a valuation that still has room to go. Compared to peers, 抖阴最新版 is actually the relatively favorable bet from a valuation standpoint. That means something, for many value-conscious growth investors.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
