AMD’s revenue falls short of expectations, stock price plummets

The Super Microcomputer logo can be seen on the smartphone screen.

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super microcomputer On Wednesday morning, the server company raised its revenue guidance, but reported third-quarter revenue that was slightly lower than expected, causing the company’s stock price to plummet 18%.

The company reported revenue of $3.85 billion on Tuesday, below the $3.95 billion expected by analysts polled by LSEG. Adjusted earnings per share were $6.65, beating analysts’ expectations of $5.78 per share.

Super Micro raised its revenue forecast for fiscal 2024 to US$14.7 billion to US$15.1 billion, exceeding LSEG’s forecast of US$14.6 billion.

In 2023, the company’s competitors include Dell and Hewlett Packard Enterprisemay be an important supplier of servers Nvidiawhose graphics processing unit runs powerful artificial intelligence models.

Super Micro joined the S&P 500 in March. Its shares are still up about 150% this year.

Bank of America analysts reiterated a buy rating on AMD while lowering their price target to $1,090 from $1,280, writing in an investor note Wednesday that their “bullish thesis remains intact” citing the Factors include Nvidia’s good guidance and ability to capture the needs of other chipmakers.

“Supermicro remains a pure-play AI server vendor and we expect our forecasts to continue to be revised aggressively over the long term,” the analysts wrote.

JPMorgan analysts, who rate the stock an “overweight” with a $1,150 price target, praised Super Micro’s business prospects and wrote that the company has “little concerns” about demand and supply growth. Still, they discussed concerns about the company’s willingness to sacrifice profits and the need for more financing, which could dilute earnings.

“We were surprised by the strong revenue momentum and continued industry demand momentum, with AMD’s growth solidifying its strong leadership position in the market,” analysts wrote in a note on Tuesday.

Also on Tuesday, analysts at Wells Fargo maintained an equal-weight rating on AMD stock, lowering their price target to $890 from $960. Barclays analysts maintained a neutral rating and raised their target price to $1,000 from $961.

“SMCI maintains a strong competitive moat based on our supply chain examination,” Barclays analysts wrote.

—CNBC’s Michael Bloom contributed to this report.