AMD revenue forecast fails to allay concerns as soft console demand tingles



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AMD revenue forecast fails to allay concerns as soft console demand tingles

On Tuesday, the 28th of January 2020, the Santa Clara, CA-based American multinational semiconductor manufacturer, revealed its first quarter revenue estimate which fell far behind an analysts’ estimate amid a dwindling demand of gaming consoles despite a rebound at its PC Chips and data centre businesses.

Besides, following reveal of the Santa Clara-based chipmaker’s Q1, 2020, profit and sales forecast, shares of AMD fell just a notch shy of 4.5 per cent to $48.30 in after-market trading after wrapping up the day in an upbeat note, raising as much 2.58 per cent to $50.53 a share.

Nonetheless, amid a robust U-turn in data centre business, AMD stocks had surged more than 150 per cent over the course of last twelve months which eventually had made it the largest gainer on both S&P 500 and Philadelphia Semiconductor index last year.

However, as the US-based chipmaker’s console business remained under heavy pressure ahead of launches of new game consoles from Sony Corp. alongside Microsoft Corp., emphasizing on data-centre growth, an analyst at Summit Insights Group LLC., KinNgai said late on Tuesday (January 28th), “The secular decline in the game console semi-custom chip (SoC) should have been expected.

I think investors wanted to see a steeper growth profile from its datacentre, CPU business to offset the near-term gaming SoC decline. ”