HomeBusinessAMD Data Center Sales Miss Estimates in the sign of AI delay

AMD Data Center Sales Miss Estimates in the sign of AI delay

(Bloomberg) – Advanced Micro Devices Inc. Reported disappointing results for his data center department, indicating that it does not make a profit on Nvidia Corp. On the market for artificial intelligence computing.

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Although the total estimates from AMD to estimates – and it delivered a solid prediction for the current period – the data center unit was seen as a weak spot. Shares of the chip maker fell 5% in the late trade after the report was released.

Sales in the division was $ 3.86 billion in the fourth quarter. That increased from a year earlier by 69%, but analysts had projected $ 4.09 billion. The total turnover will be $ 6.8 billion to $ 7.4 billion in the current quarter, the company said on Tuesday. Analysts estimate on average $ 7.04 billion.

The report renewed concern that AMD’s push in AI equipment has lost some momentum – confirming the fears of analysts and investors. That sentiment was fired up in recent weeks by the arrival of a Chinese startup with a cheaper approach. AMD shares had fallen 1.1% this year to Tuesday.

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Although AMD won the market share of Intel Corp. In Personal Computers and Servers last quarter, that area is less a growth motor. PC chips yielded $ 2.3 billion in income last quarter and at the top of the estimate of $ 1.99 billion.

AMD tries to persuade some of the largest companies in the world to include its AI products in their expansion plans for data centers. It is still playing with Nvidia in this endeavor. Although AMD now generates more than $ 5 billion in annual turnover from the accelerator chips that help develop AI models, Nvidia’s turnover in this category is more than $ 100 billion a year.

The income from AMD’s fourth quarter increased by 24% to $ 7.66 billion, which was the estimate of $ 7.54 billion. The profit was $ 1.09 share, minus certain items, in accordance with predictions.

The Chinese startup Deepseek said last month that it was able to develop a competitive AI model against the fraction of the costs made by larger American companies. That announcement caused a sale in AI-related shares, including AMD and Nvidia, at concern that the enormous projected edition on new hardware will not be necessary.

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AMD also supplies adapted processors for Microsoft Corp. and Sony Group Corp. For their game consoles. That unit has seen a weaker sale, hurt by the current generation of machines approaching the end of their life cycles. GAME turnover fell by 59% to $ 563 million in the fourth quarter.

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