Shareholders were generally encouraged by what Advanced Micro Devices (AMD 2.80%) said about its business and its prospects after the closing bell when it published its most recent financial results.
After hours on Tuesday, Advanced Micro Devices (AMD) stock increased by 4%. Although the semiconductor manufacturer’s second-quarter revenue earnings were much down from year-ago levels, they provided some comfort to investors by demonstrating that it will not abandon the artificial intelligence market to its chip-making rivals.
The financial results of AMD were not impressive. To $5.36 billion, revenue decreased 18% from the previous year. As a result of sharply declining margins, adjusted net income fell to $948 million from levels a year earlier, a 44% decrease. This resulted in adjusted earnings of $0.58 per share, which, while higher than some had anticipated, still underscored the cyclical character of the overall semiconductor market.
The biggest issue was AMD’s client division, which saw revenues drop by more than half due to a dramatically decreased demand for PCs. After experiencing a significant increase in sales during the early years of the COVID-19 pandemic, AMD is now finding it difficult to adjust to the return of secular patterns that favor mobile devices over PCs.
Even yet, the chipmaker is confident about a Q2 rebound because new platforms and chips will be introduced later in 2023.
Investors, however, paid more attention to the data center market, which performed well and in which AMD is positioned to benefit from demand for generative AI. Furthermore, the company forecast revenues of $5.4 billion to $6 billion for the third quarter, indicating that AMD’s sequential recovery may continue to gain traction.
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