AMD stock fell Wednesday after the chipmaker posted a poor third-quarter report amid weak personal computer sales.
Advanced Micro Devices late Tuesday missed Wall Street's lowered expectations for the September quarter and disappointed with its sales guidance.
The Santa Clara, Calif.-based company earned an adjusted 67 cents a share on sales of $5.57 billion in the third quarter. Analysts polled by FactSet had expected AMD earnings of 69 cents a share on sales of $5.65 billion. On a year-over-year basis, AMD earnings fell 8% while sales rose 29%.
On Oct. 6, AMD slashed its outlook for the third quarter, noting declining PC sales.
For the current quarter, AMD predicted sales will rise 14% to $5.5 billion. However, analysts were predicting $5.95 billion.
AMD Stock Drops After Report
On the stock market today, AMD stock lost 1.7% to close at 58.63. As of Wednesday's close, AMD stock is down 59.3% in 2022.
"Third-quarter results came in below our expectations due to the softening PC market and substantial inventory reduction actions across the PC supply chain," Chief Executive Lisa Su said in a news release.
She added, "Despite the challenging macro environment, we grew revenue 29% year over year driven by increased sales of our data center, embedded and game console products."
AMD's data-center chip sales jumped 45% year over year to $1.6 billion in the third quarter. Its gaming chip sales increased 14% to $1.6 billion. But PC chip sales fell 40% to $1 billion.
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AMD Has Subpar Composite Rating
At least seven Wall Street firms cut their price targets on AMD stock after the company's earnings report.
Earnings reports from semiconductor stocks this week have been a mixed bag. On Monday, Lattice Semiconductor and Rambus delivered beat-and-raise quarterly reports.
Meanwhile, NXP Semiconductors and Onsemi topped their September-quarter targets but disappointed with their guidance.
AMD stock ranks No. 12 out of 34 stocks in IBD's fabless semiconductor industry group, according to IBD Stock Checkup. It has a subpar IBD Composite Rating of 46 out of 99.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
