AMD (AMD) reported its fourth quarter earnings after the bell on Tuesday, beating expectations on the highest and backside traces and offering a better-than-anticipated Q1 forecast.
The chipmaker’s announcement comes the identical day President Donald Trump enacted a ten% tariff on items made in China and somewhat over every week after China-based DeepSeek rocked the tech world with its low-cost AI fashions.
Regardless of the earnings beat and stronger steerage, AMD inventory fell over 3.5% in after-hours buying and selling.
AMD is battling to take market share within the AI house from rival Nvidia (NVDA), which dominates gross sales of high-powered AI chips. On the identical time, the corporate is contending with a continued slowdown in PC gross sales, even because the trade works to push customers and enterprises towards AI PCs — computer systems that function specialised processors designed to energy AI duties.
For the quarter, AMD reported earnings per share (EPS) of $1.09 on income of $7.56 billion. Wall Avenue was anticipating EPS of $1.09 and income of $7.5 billion, in response to Bloomberg consensus estimates. The corporate’s knowledge middle enterprise, its largest section by income, introduced in $3.9 billion, simply shy of expectations of $4.09 billion for the quarter.
AMD’s shopper section, which incorporates chips for PCs, generated $2.3 billion for the quarter. Analysts have been anticipating income of $1.98 billion. The corporate additionally noticed Gaming income of $563 million. Wall Avenue was on the lookout for $487 million.
For the present quarter, AMD anticipates income between $6.8 billion and $7.4 billion. Wall Avenue had anticipated $7.0 billion.
AMD shares have struggled all through the final 12 months, falling 33% in comparison with rival Nvidia, which has jumped 80%. Nonetheless, that’s higher than archnemesis Intel (INTC), which has seen shares fall 54% in the identical time interval.
Whereas Trump’s tariffs on Chinese language-made items received’t impression the vast majority of the high-end chip market, since many are manufactured in areas like Taiwan, the broader marketplace for electronics, together with servers and PCs, that are inbuilt China, might be impacted.
Learn extra: What are tariffs, and the way do they have an effect on you?
If companies and customers are turned off by increased costs on these methods and units, chip producers like AMD might face slowing gross sales.
Past the tariffs on Chinese language items, Trump has additionally raised the specter of tariffs particularly focusing on semiconductors and merchandise related to them in a bid to deliver manufacturing to the US. However these sorts of tariffs drive up costs for customers for a protracted stretch of time, as constructing chip services is a fancy activity that takes years to finish.
