AMD reports weak guidance amid slowing PC market, stock falls

Yahoo Finance Live anchors discuss second-quarter earnings for AMD.

影片文字轉錄稿

BRIAN SOZZI: AMD shares are hot on Yahoo Finance trending ticker page, as the chip giant posted a weak third quarter outlook as it feels the pain of the slowing PC market. I have a story on that slowing PC market now on our home page. But it was just startling to hear AMD CEO Dr. Lisa Su talk about, really a marked slowdown in PCs. This is what we heard from Intel's CEO, as well.

BRAD SMITH: You know it's kind of added on.

PAT GELSINGER: --than with misses in our inventory, understanding of our customers. And they created, you know, very sharp shifts. In some say cases, 10 years, we haven't seen customers move inventory positions that rapidly. So major inventory corrections.

BRIAN SOZZI: And we're all about trying to tie everything together here at Yahoo Finance. So again, you had Intel warn major, lowered their outlook for PCs at AMD. Warn about PCs. You have to wonder, are we looking at some pretty bad quarters from HP and Dell coming up in just a few weeks?

BRAD SMITH: And the interesting thing that caught a lot of attention on the call, too, is that they didn't impact their long-term guidance at least for the rest of this fiscal year, too. And that was catching the attention, especially with the consideration of the PC TAM, Total Addressable Market, actually decelerating or moving lower here. Especially, as we've heard this time and time again from Intel, from HP-- or HPQ at this point in time.

And then additionally, what we would be looking at if PCs and those sales continue to slow down in this interim period of time is a lot of companies who are looking across the consumer technology that they have to put into the hands of their own employees. A lot of individual consumers at home, them saying, hey, we've got enough of the technology as of right now.

Plus, this is some discretionary spending that we don't want to put out the door. That is directly gonna hit all of these companies, all the way from the chip side of the business, all the way into getting much of the end products-- that is inventory that exists right now, too-- into the hands of consumers at this point.

ydjh Yeah, a couple of things to mention here, inventory, since you mentioned-- you both mentioned inventory, up about a third from the end of 2021. And what we are hearing from CEO Lisa Su at AMD, in terms of PCs, is more pessimistic than even what we heard from Intel, in terms of the overall industry. Because she's saying now that the decline in that business, and the PC business, is going to be mid-teen percentage range.

That's worse than we heard from Intel. That's worse than we've heard from sort of industry watchers as well. So that's something to really keep an eye on.

Why are they sticking with that full year forecast and longer term forecast? It's because they don't just sell PC chips, of course. They sell other types of chips. And data center chips, in particular, the demand there is still strong. Revenue growth in that sector, in that unit, up 83%. Operating income more than doubling for the data center chips.

And this is something new, by the way, that AMD is breaking out. It's getting more granular on the different types of chips and providing more transparency to investors. So I mean, not surprising because that group is doing well. So that seems to be helping.