AMD tumbles 24 percent in after hours trading. AMD has reported a disappointing third-quarter earnings report which subsequently sent shares tumbling 24% in after-hours trading. AMD cited the lower-than-expected revenue and guidance on an extremely sharp downturn in the graphics card market which was largely fueled by the collapse of the cryptocurrency/blockchain market. Do you agree that the cryptocurrency/blockchain market has collapsed?
AMD’s CEO Lisa Su said that the massive downturn in GPU sales has left AMD overstocked with inventory and it could take “several quarters” to correct. AMD reported $1.65B in revenue, which is a 4% year-over-year increase, but a 6% decline over the previous quarter.
AMD stated that they expect $1.45B in revenue next quarter, which falls short of expectations of $1.6B. AMD’s Computing and Graphics (C&G) business did $938 million in revenue during this quarter but missed the expected $1.05B estimate. Su attributed the low revenue to a $150 million drop-off in GPU sales – she admitted that the company had only planned for a $50 million decline. To combat speculation regarding industry rival Nvidia, AMD attributed the slowdown “almost entirely” to the crypto/blockchain crash.
Last year, Su stated that the company would boost GPU production despite the risks of a downturn in the crypto market. At the time, Su cited several factors and safeguards that would shield AMD from oversupply – it is currently unclear if the boosted production has contributed to AMD’s oversupply of GPUs.
One bright spot on AMD’s report was the performance of their Ryzen processors. Su claims that AMD has gained market-share and that Ryzen chips now comprise 70% of the company’s revenue from processors. The company also achieved its highest processor unit shipments since Q4 2014. AMD is counting on products such as their Ryzen processors to increase their profit margins.
Su acknowledged that the performance of their processors was helped by “pockets of shortages”, definitely a reference to Intel’s production shortages, but didn’t elaborate any further.
AMD is waiting the lucrative holiday season. Intel is still struggling with their production shortage, and AMD could be salivating at the opportunity to increase their market share. AMD is notably tempering expectations, however, given that they aren’t forecasting a drastic increase in sales or marketshare in the next quarter. AMD continues to focus on profitability and product mix – this will no doubt play in AMD’s favor in the future.
What do you think? Do you think AMD’s marketshare and stock will increase during the next Bull Run? Do you think mining will come back? Do you currently mine? Or do you think the market shifting towards Proof of Stake is just ultimately better? Do you think more people will start mining once they get to learn more about cryptocurrency? We know one way they’ll learn more about crypto – ATMs! Let us know on our Facebook page!
