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2mo ago

AMD Faces Investor Scrutiny Ahead of Q4 Earnings as AI Market Dynamics Shift

AMD's growth projections highlight strong AI demand, but competition from Nvidia, custom silicon, and new Chinese players raises questions about its long-term strategy.

A smartphone with a displayed AMD logo is placed on a computer motherboard in this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
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Overview

  • AMD is set to report Q4 earnings on Tuesday, with analysts projecting a 22% revenue increase to $7.53 billion and a 61% rise in net income to $1.08 billion.
  • The company’s data center segment is expected to grow 82% year-over-year, driven by demand for AI chips, while its gaming segment faces a significant revenue decline.
  • Nvidia remains a dominant competitor in the AI chip market due to its CUDA software, while Big Tech firms like Microsoft, Amazon, and Meta are increasingly developing custom silicon solutions.
  • Chinese AI startup DeepSeek has introduced cost-efficient AI models that could disrupt the global AI chip market, raising concerns about future infrastructure spending.
  • U.S. tariffs on Chinese-made goods and potential semiconductor-specific tariffs could impact AMD's broader market, though PC makers may have stockpiled chips ahead of these measures.