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  • Summary

  • Companies

  • AMD growth outlook falls short of lofty expectations

  • Investors want more proof firm can cash in on the AI boom

  • Shares decline more than 6%

Aug 5 (Reuters) - Advanced Micro Devices (AMD.O), opens new tab shares tumbled on Wednesday as the chipmaker's revenue ‌forecast failed to impress investors seeking clearer signs that a multibillion-dollar AI spending boom will translate into faster growth.

Shares were last down 6.6% at $482.53, set to erase close to $59 billion ​from the company's market value.

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AMD's stock was also hit by SpaceX's (SPCX.O), opens new tab ​CEO Elon Musk's decision to build the company's computing infrastructure exclusively ⁠with rival Nvidia's (NVDA.O), opens new tab chips. Shares of the AI bellwether gained 3.3% in ​early trading.

AMD's decline lays bare the elevated expectations from the company, which signed deals ​last month with Anthropic and Core Scientific (CORZ.O), opens new tab, to win high-profile customers and close the gap on Nvidia and Intel (INTC.O), opens new tab.

"We suspect expectations had moved higher following Intel's results a couple of weeks ago, and ​the buyside already has a fairly bullish outlook," said Stacy Rasgon, analyst ​at Bernstein.

The Santa Clara, California-based firm forecast third-quarter revenue of about $13 billion, plus or minus $300 million, above analysts' estimates ‌of $12.52 ⁠billion, according to data compiled by LSEG.

Analysts at TD Cowen said AMD faced a "very high bar" after recent AI-related customer wins and a sharp rally in its shares, even though its results and forecast were "objectively good".

J.P.Morgan analysts said supply ​constraints remain a ​risk, with projects ⁠concentrated on TSMC's N3 process and CoWoS chip-packaging technology likely to face tightness through 2027.

Chief Executive Lisa Su said AMD ​expects data-center revenue to more than double by 2027 and ​projected revenue ⁠growth above its previously outlined target of more than 35%. AMD's data-center revenue more than doubled to $6.72 billion, topping expectations.

AMD's stock has more than doubled this year ⁠on ​expectations that the company will emerge as the ​leading alternative to Nvidia in AI chips, raising the ante for quarterly results.

Reporting by Rashika Singh and ​Purvi Agarwal in Bengaluru; Editing by Mrigank Dhaniwala, Devika Syamnath and Tasim Zahid

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Rashika Singh

Thomson Reuters

Rashika reports on brokerages and financial markets, alongside technology and corporate developments for Reuters, with a focus on U.S. and global companies. Her coverage spans analyst actions, earnings-driven stock moves, semiconductors, artificial intelligence, aerospace and defense, and high‑growth technology stocks, often through breaking news and market‑moving “hot stock” coverage. Her reporting primarily appears in the Technology, Business, and Markets sections of the Reuters website and wire service, examining how brokerage research, corporate strategy and earnings influence investor sentiment and global competition. She regularly contributes to Reuters’ spot and breaking‑news coverage, rather than a named column or standalone newsletter.

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