Advanced Micro Devices (NASDAQ:AMD) is a Santa Clara-based semiconductor company. Shares of this technology stock have climbed 21% month-over-month as of early morning trading on Wednesday, January 31. The stock has surged 123% in the year-over-year period. However, the stock has stumbled 8.2% over the past week. What is behind this latest retreat?
On Tuesday, January 30, AMD announced that it moved to bolster its 2024 forecast for its artificial intelligence (AI) processors by $1.5 billion. The company has moved to nearly double its AI processor projections, but that has not been enough to impress Wall Street analyst expectations. It forecasted revenues that fell below Wall Street’s expectations on the same day.
In the fourth quarter (Q4) of fiscal 2023, AMD delivered total revenue of $6.16 billion – up 10% from $5.59 billion in the previous year. Meanwhile, gross profit climbed 21% year-over-year to $2.91 billion while operating expenses were flat at $2.57 billion. For the full year, AMD saw revenue slip 4% to $22.6 billion. Moreover, gross profit fell 1% to $10.4 billion. Operating expenses jumped 7% year-over-year to $10.0 billion. Worse, net income was reported at $854 million or $0.53 per share – down 35% and 37%, respectively, compared to the prior year.
AMD boasts a rock solid balance sheet and is geared up for strong earnings growth going forward. However, that might still not be enough to please its shareholders in an intensely competitive environment.
