After competitor AI chipmaker Advanced Micro Devices (AMD) let investors down with its cautious guidance, Nvidia’s (NVDA) stock dropped on Wednesday. Following quarterly reporting from AMD and Skyworks Solutions (SWKS), semiconductor equities generally suffered a loss.
Although sales were a little behind expectations, AMD met Wall Street’s first-quarter earnings target late on Tuesday. Although Wall Street was expecting a greater lift from the company’s MI300 AI accelerator division, its sales guidance for the current quarter was essentially in line with projections.
From $3.5 billion to “at least $4 billion,” AMD increased its revenue goal for the MI300 in 2024. However, a lot of people on Wall Street were hoping for updated estimates for the product of $4.5 billion to $5 billion. Over $6 billion in MI300 sales was the aim set by some bullish projections for this year.
Following AMD’s Q1 release, at least twelve Wall Street analysts lowered their price targets for the company’s shares.
AMD Stock Falls, Pulls Nvidia Stock Down
AMD’s shares fell 8.9% on the stock market today, closing at 144.27. The stock of Nvidia fell 3.9% to 830.41.
Mark Lipacis, an analyst with Evercore ISI, stated that worries regarding MI300 sales are “overdone.”
“Our investment thesis is that the AI chip market will grow to an $80 billion market over the next five years and that AMD will capture up to 20% of that market — and we did not hear anything on the (AMD) call that moves us away from that thesis,” Lipacis said in a client note. Nvidia is likely to continue to lead the AI chip market, analysts say.
Semiconductor Stocks Retreat
Amidst semiconductor stocks, Skyworks, a manufacturer of wireless chips, posted a moderate beat for the March quarter but gave significantly lower guidance for the June quarter. Skyworks is highly susceptible to the waning smartphone industry.
Skyworks’ stock fell 15.3% on Wednesday, closing at 90.30.
In the meantime, 3.5% fell in the Philadelphia Semiconductor Index, or SOX. The top 30 semiconductor stocks traded in the US are included in the SOX.
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