AMD confession said, “The lower preliminary revenue results are primarily due to business conditions that materialized late in the second quarter, specifically softer-than-expected channel sales in China and Europe as well as a weaker consumer buying environment impacting the company’s OEM business.”
About the only good news is that gross margin is still expected to be roughly in line with its prior guidance. Operating expenses in the quarter were also expected to improve and to be approximately 8% lower than prior guidance of approximately $605 million.
What AMD did not say is that the competition from Intel Corporation (NASDAQ: INTC) on the processor side nor that competition from NVIDIA Corporation (NASDAQ: NVDA) are killing the company. That competition is of course always implied. AMD can probably face some serious questioning here. Think about this: -11% versus +3%. That is a huge shortfall.
AMD shares closed down 2.25% at $5.62 and the stock is down 4.2% at $5.38 in the after-hours session against a 52-week range of $4.31 to $8.35. The value at the close today was a mere $3.94 billion.
The question that needs to be asked at this point is if AMD is even relevant any longer? AMD’s news has Intel Corporation (NASDAQ: INTC) down 1% at $25.90 in the after-hours session against no reaction so far in NVIDIA Corporation (NASDAQ: NVDA).
JON C. OGG
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