AMD Keeps Falling After Beat-and-Raise Q3. Should You Buy?

"AMD's data center segment led the charge in Q3, generating a record $4.3 billion in revenue, a 22% increase from last year, driven by the Instinct MI350 series GPUs and EPYC processor gains. Operating income rose to $1.1 billion, though the margin dipped to 25% from 29% due to higher revenue scaling. This segment's 611.64% total revenue growth since March 2021, with a 54.4% CAGR, underscores AMD's AI and server market traction."

"The client segment, catering to PCs, saw a 46% revenue jump to $2.8 billion, fueled by AI-enabled PC upgrades and a Windows cycle. This rebound reflects broader market recovery, with Gartner noting an 8% rise in global PC shipments. Gaming revenue hit $1.3 billion, up 181%, signaling a strong comeback after pandemic-related dips. Yet, operating income across segments remains uneven, with the third quarter in recent years being uneven."

Advanced Micro Devices reported Q3 revenue of $9.2 billion, up 36% year-over-year, with adjusted earnings of $1.20 per share and raised Q4 guidance to $9.6 billion. The stock declined about 9% in the days after. The data-center segment generated a record $4.3 billion, up 22%, driven by Instinct MI350 GPUs and EPYC processors; operating income rose to $1.1 billion while margins fell to 25% from 29% amid higher revenue scaling. That segment grew 611.64% since March 2021, a 54.4% CAGR. Client revenue rose 46% to $2.8 billion and gaming revenue rose 181% to $1.3 billion. Limited MI308 GPU sales to China and uneven operating income raise cost-management and growth-concentration concerns.

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