Results suggest the chipmaker is still lagging behind Nvidia
Company fares better in PC market, making gains on Intel
Advanced Micro Devices Inc. reported disappointing results for its data center division, signaling that it’s not making gains on Nvidia Corp. in the market for artificial intelligence computing.
Though AMD’s overall revenue topped estimates — and it provided a solid forecast for the current period — the data center unit was seen as a weak spot. Shares of the chipmaker slid 5.5% in late trading after the report was released.
Revenue in the division was $3.86 billion during the fourth quarter. That jumped 69% from a year earlier, but analysts had projected $4.09 billion. Total sales will be $6.8 billion to $7.4 billion in the current quarter, the company said Tuesday. Analysts estimated $7.04 billion on average.
The report renewed concern that AMD’s push into AI equipment has lost some momentum — confirming the fears of analysts and investors. That sentiment was stoked in recent weeks by the arrival of a Chinese startup with a cheaper approach. AMD shares had dropped 1.1% this year through Tuesday’s close.
Though AMD won market share from Intel Corp. in personal computers and servers last quarter, that area is less of a growth driver. PC chips brought in $2.3 billion in revenue last quarter, topping the $1.99 billion estimate.
AMD is trying to persuade some of the biggest companies in the world to include its AI products in their data center expansion plans. It’s still playing catch-up with Nvidia in this endeavor. Though AMD now generates more than $5 billion in annual revenue from the accelerator chips that help develop AI models, Nvidia’s sales in this category exceed $100 billion a year.
AMD’s fourth-quarter revenue rose 24% to $7.66 billion, topping the $7.54 billion estimate. Profit amounted to $1.09 share, minus certain items, in line with predictions.
Chinese startup DeepSeek said last month that it was able to develop a competitive AI model at the fraction of the expense incurred by larger US companies. That announcement provoked a selloff in AI-related stocks, including AMD and Nvidia, on concern that the huge projected outlay on new hardware won’t be necessary.
AMD also supplies custom processors for Microsoft Corp. and Sony Group Corp. for their game consoles. That unit has seen weaker sales, hurt by the current generation of machines nearing the end of their life cycles. Gaming revenue fell 59% to $563 million in the fourth quarter.