Earnings Outlook: AMD earnings face even more scrutiny after ‘astonishingly bad’ Intel outlook

by | Jan 27, 2023 | Stock Market

Advanced Micro Devices Inc. gets to show Wall Street if it “certainly” ended 2022 in a better place, after the price of clearing inventory helped gut results from rival Intel Corp. AMD
is scheduled to report earnings after the close of markets on Tuesday.

AMD Chief Executive Lisa Su said three months ago that the company’s outlook, which fell below Wall Street estimates at the time, included the cost of clearing out inventory, and that the company would “certainly exit the year in a better place.” Su also said that data-center sales were “expected to grow.” Doubts about data-center demand and the cost of excess inventory have grown though, after Intel
reported earnings that showed inventory clearance was gutting gross margins as the CPU maker faced the worst PC shipment declines in recorded history. Additionally, Intel said it expected the overall data-center market to fall at “an accelerated rate.” Read: ‘It’s not an earnings release, it’s a crime scene’: Analysts, and social media, react to Intel’s awful quarter Bernstein analyst Stacy Rasgon, who downgraded AMD to market perform from outperform recently, said AMD had “no margin for error” in its report, and this was before he saw Intel’s “astonishingly bad” outlook fail to beat already low expectations “with revenues and gross margins collapsing amid a further weakening environment and an absolutely massive inventory flush.” Rasgon said the PC market has worsened considerably, to the point where his “belief that AMD would prove relatively more immune to channel degradation proved unfortunately incorrect.” And with jam …

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