Advanced Micro Devices (AMD) has projected lower-than-expected revenue for the second quarter, highlighting that the company is likely to continue facing challenges due to weak PC sales and the data center market. The stock price fell by more than 4% in after-hours trading. While rival Intel recently reported that it expected the PC market to rebound in H2 2023, sparking hopes that AMD’s PC business would recover, AMD’s Q1 results indicated that demand remains low. AMD’s enterprise, cloud, and China server customers have cut orders, with Intel expecting data center demand to decline throughout H1 2023 and only partially recover in H2. The weakness has also been felt among US cloud customers, with networking equipment makers’ order cuts casting a shadow over demand for Xilinx products.
CEO Lisa Su remained optimistic in initial comments released with the earnings report, saying that “longer-term, we see significant growth opportunities as we successfully deliver our road-maps, execute our strategic data center and embedded priorities and accelerate adoption of our AI portfolio.” However, AMD’s current-quarter revenue forecast of approximately $5.3 billion, plus or minus $300 million, fell short of analysts’ Refinitiv consensus estimate of $5.48 billion.
In Q1, revenue from AMD’s client segment, which includes personal computers, fell by 65% to $739 million. Meanwhile, data center segment revenue was flat at $1.30 billion during the same period.