(Reuters) – Advanced Micro Devices forecast third-quarter revenue below market expectations on Tuesday, hit by a slowdown in cloud computing spending.
Large cloud players like Microsoft and Google plan to ramp up spending on data centers in the second half of the year and that spending will skew toward AI chips and infrastructure, analysts said.
While AMD has announced its own competitor to market leader Nvidia’s AI chips, those would not hit the market until the fourth quarter this year.
However, PC shipments decline has moderated and demand has started showing signs of improvement.
“Looking to the third quarter, we expect our Data Center and Client segment revenues to each grow by a double-digit percentage sequentially driven by increasing demand for our EPYC and Ryzen processors, partially offset by Gaming and Embedded segment declines,” said AMD finance chief Jean Hu.
The company forecast current-quarter revenue of about $5.7 billion, plus or minus $300 million. Analysts polled by Refinitiv expect revenue of $5.82 billion.
(This story has been corrected to change the attribution of a quote in paragraph 5)
(Reporting by Chavi Mehta in Bengaluru; Editing by Arun Koyyur)
