Despite the company’s guidance falling short of expectations, Advanced Micro Devices stock increased in premarket trade on Wednesday, lifting other chip stocks higher.
Following the release of AMD’s third-quarter earnings late Tuesday, the chipmaker’s shares increased 4.6% before the market opened.
In early premarket trade, Nvidia stock increased 1.6%, while Intel (INTC) saw a 0.7% increase. Texas Instruments (TXN) and Micron Technology (MU) also increased.
According to FactSet statistics, AMD announced third-quarter adjusted earnings per share of 67 cents, beating the Wall Street forecast of 69 cents. The $5.6 billion in revenue matched expectations. In October, AMD reduced its projected revenue for the third quarter by more than $1 billion, citing weakening PC demand and inventory adjustments throughout the PC supply chain.
The semiconductor business stated that it anticipates revenue for the current quarter to be approximately $5.5 billion plus or minus $300 million. That is less than the $5.8 billion estimate made by analysts. Given the significant reduction in AMD’s third-quarter outlook, investors may have been anticipating considerably worse outcomes. Despite the earnings miss, the stock increased by more than 4% in after-hours trading.
In a note published late Tuesday, analysts at Piper Sandler lead by Harsh Kumar said: “In our assessment, AMD continues to making progress in their PC inventory clean up, and predictions are that the PC business will only be down marginally in the December quarter.”
“Overall, we think AMD’s revenues and earnings are currently in a bottoming phase. We expect March to be seasonally weak, followed by noticeably stronger trends in June 2023,” they continued, maintaining their Overweight rating on the stock.
Featured Image – Megapixl © Andreistanescu
Author Valerie Remorosa 
