viewAdvanced Micro Devices, Inc.

Advanced Micro Devices misses on 3Q revenue as crypto miner demand deflates

The semiconductor company offered a weak outlook for its fourth quarter as blockchain-related sales slipped

Advanced Micro Devices sign
AMD’s graphics cards can be used for cryptocurrency mining

Advanced Micro Devices Inc (NASDAQ: AMD) shares plummeted double digits following disappointing third-quarter results.

The chipmaker reported earnings of $0.09 per share on revenue of $1.65 billion compared with $0.06 on revenue of $1.58 billion in the previous year’s third quarter.

The California-based company reported adjusted earnings of $0.13 per share, ahead of analyst estimates of $0.12 per share. However, revenue fell short of expectations of $1.6 billion.

Shares sank more than 15% to $19.37 in Thursday afternoon trading.

READ: Texas Instruments misses on revenue, offers weak 4Q guidance; analysts weigh in on what it means for chip sector

AMD’s graphic business took a hit as blockchain-related sales slipped. The graphics cards can be utilized by cryptocurrency miners, but demand has decreased alongside the price of Bitcoin.

Blockchain sales comprised a “high single-digit percentage” of AMD’s revenue in the previous third quarter, but Chief Financial Officer Devinder Kumar said the amount was “negligible” in this quarter.

Computing and graphics sales totaled $938 million for the quarter, below the $1.05 billion analysts had expected.

For the quarterly report ahead, AMD is in the same boat as fellow chipmakers like Texas Instruments, forecasting a weaker-than-expected outlook.

Revenue for the fourth quarter is expected to total between $1.4 billion to $1.5 billion, falling short of analyst expectations of $1.6 billion.

An analyst weighs in

Baird analyst Tristan Gerra reiterated a Neutral rating on AMD’s share, noting the effect of seasonality on the fourth quarter results.

“While AMD's execution and share gains remain on target, the significant estimate upside needed to justify the stock's valuation did not materialize this quarter, as Semi-Custom seasonality and a GPU revenue reset marred the 4Q outlook,” wrote Gerra.

Although its graphics business declined more than what Baird had expected, the analyst highlighted management’s expectation that sequential growth is set to resume in the fourth quarter as inventory correction may be behind.

Baird did lower its price target on AMD to $25 from $28 as the potential impact of China tariffs weigh heavily on tech stocks.

--Updated to include analyst commentary and recent share price


Contact Lenore Fedow at [email protected]

Follow her on Twitter@LenoreMariee

Quick facts: Advanced Micro Devices, Inc.

Price: 78.3 USD

Market: NASDAQ
Market Cap: $92 billion

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