AMD plummets 8% in premarket trading despite beating expectations
📰 source: cnbc_topnews · 💼 business
amd shares plunged 8.7% in premarket trading wednesday, even though the chipmaker beat expectations for its second quarter. revenue rose 50% to $11.54 billion, ahead of analysts' $11.28 billion forecast. data center sales jumped 107% to $6.7 billion, driven by cpu and gpu sales.
but the earnings print only came in 'slightly ahead' of consensus, and missed the more optimistic estimates that some investors had built in, according to deutsche bank analysts. the stock is still up 132% this year, and morningstar's chief equity strategist michael field noted the market's expectations were too high, citing a price-to-earnings multiple of 170 after the stock trebled in twelve months.
ceo lisa su said ai is driving significant demand for compute across all markets, and amd earlier this month raised its semiconductor industry forecast to $2 trillion by 2028, with $1.4 trillion expected from ai accelerators. field sees the dip as a potential buying opportunity.
why it matters: amd's drop despite a beat shows how inflated ai chip valuations have become, with a pe of 170 leaving little room for error.
source: cnbc_topnews
sentiment: -0.70 · impact: 0.85