Subscribe to our newsletter! Stay always in touch!
Disclaimer: The information provided by The People’s Economist (TPE) in our financial calculators and dashboards is for general informational purposes only and is not intended to provide specific financial or investment advice. The calculations provided by these tools are based on certain assumptions that may vary with your specific circumstances. Though TPE does our best to assure the accuracy of our calculators, we make certain simplifying assumptions in some cases and the results of the financial calculators are not guaranteed and are not a substitute for professional financial advice. Users should seek the advice of a finance professional before making any financial decisions. Though we do our best to ensure the accuracy of the calculators, TPE is not responsible for any errors or omissions, or for any action taken in reliance on information contained on this website. TPE expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this website. By using TPE financial calculators and dashboards, you agree to hold TPE harmless from any and all losses, liabilities, or expenses incurred as a result of using the information provided. The use of TPE Website and its contents does not create a client relationship with TPE. TPE may update or modify this disclaimer at any time without prior notice. By continuing to use TPE’s financial calculators after any changes to this disclaimer, you accept and agree to any and all modifications. Please contact us with any questions or concerns about this disclaimer or its use of financial calculators
What happened: Advanced Micro Devices (AMD) dropped 5% on Wednesday.
What's behind the move: The chipmaker reported record revenue and second quarter earnings on Tuesday, beating Wall Street expectations on both top and bottom lines.
However, the company's results and forecast failed to impress investors looking for bigger beats.
"It was priced for something much closer to a blowout," Shay Boloor, Futurum chief market strategist, told Yahoo Finance after the earnings report. "It was priced for an exceptional result, and this was not an exceptional result."
AMD reported revenue of $11.54 billion, up 50% from $7.69 billion a year prior, topping Wall Street expectations. Adjusted earnings per share came in at $1.66 against the $1.62 expected.
Wall Street even expected booming growth in data center revenue, which more than doubled year-over-year and now represents 58% of total revenue, up from 42% a year ago.
More from Yahoo Scout What drove AMD's significant capital expenditure increase? Why did AMD stock drop despite record revenue? How does AMD's Q3 guidance compare to expectations? What challenges is AMD facing in gaming revenue?
"The company did beat across the board, but it wasn't enough to reset expectations for a stock that's trading nearly 60 times earnings," Boloor said.
Capital expenditures also increased significantly, reaching $808 million for the quarter, up from $282 million in the year-ago period and $389 million in the March quarter.
"That's a shocking upside revision for the capex number," the strategist added.
What else you need to know: For the current quarter, AMD expects revenue of approximately $13 billion, plus or minus $300 million. While that exceeds some analyst estimates of $12.5 billion, it falls short of the highest forecasts, which called for up to $14 billion.
The company also warned of a slowing PC market, though it expects to outperform the broader industry.
"Looking to the second half of the year, we're planning for a softer PC market as higher memory and component costs weigh on demand," CEO Dr. Lisa Su said during the company's earnings call.
"Against this backdrop, we expect our client business to perform better than the market," she added.
AMD noted that Gaming graphics revenue declined year over year, as higher industrywide component costs drove up graphics card prices and weighed on overall demand.
Like many semiconductor stocks, AMD has posted an impressive gain this year, though the shares have experienced periods of volatility in recent months. The stock is up more than 115% year to date
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
Click here for an in-depth analysis of the latest stock market news and events moving stock prices
Read the latest financial and business news from Yahoo Finance
