Advanced Micro Devices forecast first-quarter revenue below Wall Street estimates due to worsening PC demand and slowing data center market.
According to Intel's chief executive Pat Gelsinger, AMD's forecast mirrored Intel's gloomy outlook for the PC market, which is seeing some of the largest inventory corrections in the industry. PC shipments fell by 16.5 per cent to 292.3 million units in 2022, according to data from research firm IDC.
The chip designer had started under-shipping in response to declining processor demand, as customers looked to clear their inventory stash before buying more chips.
Chipmakers slashed revenue forecasts, triggering a sell-off in chip stocks. AMD's stock fell 55 per cent last year, underperforming the Philadelphia SE Semiconductor index during an industry downturn.
Slowing demand for graphics cards, used to enhance visuals and performance on personal computers, took a toll, while growing signs of enterprise and cloud spending slowdown was an added blow.
Revenue rose 16 per cent to $5.60 billion in the fourth quarter. According to Refinitiv data, analysts on average were expecting to see revenue of $5.50 billion.
The company forecast a current-quarter revenue of $5.3 billion, plus or minus $300 million. According to Refinitiv data, analysts believe that the average expected revenue will be $5.48 billion.