AMD Shares Feel the Heat as Intel Drags Chip Stocks Lower: What’s Going On?
Advanced Micro Devices Inc. (NASDAQ:AMD) shares are down about 8% Friday in premarket trading as chip stocks slide in sympathy with Intel Corporation (NASDAQ:INTC), which reported earnings and issued guidance on Thursday after the market closed. Intel was down 25.51% premarket today, weighing on other semiconductor names, including ASE Technology Holding Co. Ltd. (NYSE:ASX), SK Hynix Inc. (NASDAQ:SKHY) and Astera Labs Inc. (NASDAQ:ALAB).
- AMD stock is taking a hit today. What’s pressuring AMD stock?
Intel Beats on Earnings and Revenue but Guides Q4 Well Below Estimates
Intel reported third-quarter earnings of 52 cents per share, beating the consensus estimate of 40 cents. It reported revenue of $16.51 billion, beating the consensus estimate of $16.47 billion. The fourth-quarter outlook is what moved the stock. Intel expects adjusted earnings per share of 25 cents, against the consensus estimate of 43 cents, and revenue of $15 billion to $16 billion, against the consensus estimate of $17.05 billion.
"Despite near-term headwinds across the PC industry, demand for our CPUs remains robust," said Lip-Bu Tan, Intel’s CEO. "Our immediate priority is to unlock additional supply to meet extraordinary demand for our Xeon family."
Why Intel’s Report Is a Read-Through for AMD and Other Chip Stocks
Intel and AMD compete in the same markets, PC processors and server CPUs, so Intel’s weak outlook speaks to demand and supply conditions that affect both. Intel pointed to headwinds in the PC industry and said it is working to unlock more supply, which could raise questions about PC demand and about how much chip supply is constrained across the sector. AMD sells in the same PC market and has its own client business, though its growth has recently come from data center. A drop of this size in a large chipmaker also tends to pull the group lower, as investors reduce exposure to stocks that have run up. AMD shares are up about 170% this year, according to TIKR.
AMD and Meta Advance Their Partnership as Helios Racks Run at Meta
On Oct. 27, AMD said its Helios rack-scale solutions are installed and being tested at Meta, on the path to a broader deployment in the near future. AMD EPYC processors power the computing environments behind Meta’s Muse AI agent, and AMD technologies provide Day-0 support for Meta models including Muse Spark Open and Muse Glimmer. Meta has deployed millions of EPYC processors and is a lead customer for the 6th Gen EPYC, and AMD Instinct GPUs are used in production in Meta’s training, ranking and recommendation systems. Meta will also deploy a custom AMD Instinct GPU based on the MI450 architecture. AMD will invest $1 billion in Meta’s equity offering. The partnership builds on a February agreement for Meta to deploy up to 6 gigawatts of AMD Instinct GPUs, which included a performance-based warrant for up to 160 million AMD shares.
"With Helios now running at Meta, we are taking that partnership to a new scale in the superintelligence era," said Lisa Su, AMD’s chair and CEO.
AMD Set to Report Nov. 3 Following Record-Revenue Quarter
In the second quarter, AMD reported revenue of $11.54 billion, up 50%, and data center revenue of $6.7 billion, which more than doubled. AMD reports third-quarter results after the market closes on Nov. 3. Analysts estimate earnings per share of $1.95 and revenue of $13.09 billion.
AMD Shares Slide
AMD Price Action: At the time of publication, AMD shares are trading 8.02% lower at $521.00, according to data from Benzinga Pro.
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