AMD Shares Drop 8% as Intel's Weak Guidance Pressures Chip Stocks
Advanced Micro Devices shares fell about 8% in Friday premarket trading as semiconductor stocks declined following Intel's Thursday earnings release and guidance after the close. Intel shares dropped 25.51% in premarket trading, also weighing on ASE Technology Holding, SK Hynix and Astera Labs. Benzinga Pro data showed AMD at $521.00, down 8.02%, at publication.
Intel reported third-quarter earnings of 52 cents per share, above the 40-cent consensus, and revenue of $16.51 billion, topping the $16.47 billion estimate. Its fourth-quarter outlook drove the selloff. Intel forecast adjusted earnings of 25 cents per share versus a 43-cent consensus and revenue of $15 billion to $16 billion, below the $17.05 billion consensus. CEO Lip-Bu Tan said demand for Intel CPUs remained strong despite near-term difficulties in the PC industry. He said Intel's immediate priority was increasing supply to meet extraordinary demand for the Xeon family.
Intel and AMD both compete in PC processors and server CPUs, making Intel's weak guidance relevant to demand and supply conditions affecting both companies. Intel's comments could prompt questions about PC demand and the extent of chip supply constraints across the sector. AMD has a client business in the PC market; data centers have recently driven its growth. A sharp decline at a major chipmaker also tends to depress semiconductor stocks as investors cut exposure to shares that have risen.
TIKR data show AMD shares have gained about 170% this year. AMD said on October 27 that Meta had installed Helios rack-scale solutions and was testing the systems ahead of broader deployment in the near future. AMD EPYC processors support the computing infrastructure behind Meta's Muse AI agent. AMD technologies support Meta models, including Muse Spark Open and Muse Glimmer, from launch. Meta has deployed millions of EPYC processors and is a lead customer for 6th Gen EPYC. Meta uses AMD Instinct GPUs in production systems for training, ranking and recommendations. Meta will also deploy a customized AMD Instinct GPU using the MI450 architecture. AMD will invest $1 billion in Meta's equity offering. The partnership expands on a February agreement under which Meta would deploy up to 6 gigawatts of AMD Instinct GPUs. The February agreement included a performance-based warrant covering up to 160 million AMD shares. AMD Chair and CEO Lisa Su said operating Helios at Meta was expanding the partnership to a new scale in the superintelligence era.
AMD reported second-quarter revenue of $11.54 billion, an increase of 50%. AMD's second-quarter data center revenue more than doubled to $6.7 billion. AMD will release third-quarter results after trading ends on November 3. Analysts expect earnings of $1.95 per share and revenue of $13.09 billion.
