AMD Keeps Falling After Beat-and-Raise Q3. Should You Buy?

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investors get rich while others struggle because they never learned there are two completely different strategies to building wealth. Don’t make the same mistake, learn about both here.Advanced Micro Devices (NASDAQ:AMD) recently reported strong third-quarter results, with revenue hitting $9.2 billion, up 36% year-over-year, and beating Wall Street’s $8.7 billion estimate. Adjusted earnings of $1.20 per share also topped the $1.16 consensus, while the company raised its Q4 guidance to $9.6 billion.Despite this beat-and-raise performance, AMD’s stock has declined 9% in the days after. Considering the stellar, record results and the chipmaker's upbeat outlook for the immediate future -- not to mention the long-term potential of artificial intelligence (AI) -- is the market offering a discount that is just too cheap to ignore?AMD’s data center segment led the charge in Q3, generating a record $4.3 billion in revenue, a 22% increase from last year, driven by the Instinct MI350 series GPUs and EPYC processor gains. Operating income rose to $1.1 billion, though the margin dipped to 25% from 29% due to higher revenue scaling.This segment’s 611.64% total revenue growth since March 2021, with a 54.4% CAGR, underscores AMD’s AI and server market traction. As this segment previously posted only modest growth, its explosive performance over the past four years demonstrates the speed and agility it displayed in quickly making up for lost time.However, the lack of MI308 GPU sales to China, a potential growth area, may have tempered the market's expectations.The client segment, catering to PCs, saw a 46% revenue jump to $2.8 billion, fueled by AI-enabled PC upgrades and a Windows cycle. This rebound reflects broader market recovery, with Gartner noting an 8% rise in global PC shipments.Gaming revenue hit $1.3 billion, up 181%, signaling a strong comeback after pandemic-related dips. Yet, operating income across segments remains uneven, with the third quarter in recent years being uneven. This volatility raises questions about cost management as AMD scales production to meet demand.AMD also signed a multi-year deal with new kingmaker OpenAI last month, involving hundreds of thousands of MI450 GPUs and a potential 10% stake via a warrant, promising significant revenue. Although AMD initially got a stock price bump after announcing the agreement -- similar to ones seen by Oracle (NYSE:ORCL), Nvidia (NASDAQ:NVDA), and others after announcing OpenAI partnerships -- the euphoria could not withstand the sentiment following the earnings report.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,728.80 +8.48 (+0.13%)Dow 3046,987.10 +74.80 (+0.16%)Nasdaq23,004.54 -49.46 (-0.21%)Russell 20002,432.82 +14.00 (+0.58%)VIX19.08 -0.42 (-2.15%)Gold4,009.80 +18.80 (+0.47%)PortfolioSign in to access your portfolioSign inTop gainersGMED Globus Medical, Inc. 83.89 +22.18 (+35.94%)FROG JFrog Ltd. 60.00 +12.74 (+26.96%)EOSE Eos Energy Enterprises, Inc. 18.26 +2.97 (+19.42%)OS OneStream, Inc. 22.74 +3.66 (+19.18%)EXPE Expedia Group, Inc. 258.25 +38.55 (+17.55%)Top losersUI Ubiquiti Inc. 612.19 -147.38 (-19.40%)PRMB Primo Brands Corporation 14.46 -3.24 (-18.31%)RUN Sunrun Inc. 17.13 -3.29 (-16.11%)DIOD Diodes Incorporated 44.28 -7.53 (-14.53%)DOCS Doximity, Inc. 54.29 -8.29 (-13.25%)Most activeNVDA NVIDIA Corporation 188.15 +0.07 (+0.04%)OPEN Opendoor Technologies Inc. 6.56 0.00 (0.00%)ACHR Archer Aviation Inc. 8.18 -0.70 (-7.88%)PLUG Plug Power Inc. 2.6500 +0.1400 (+5.58%)PFE Pfizer Inc. 24.43 +0.01 (+0.04%)Earnings eventsMy earnings eventsEarnings eventsTrending tickersBTC-USD Bitcoin USD 101,999.59 -936.38 (-0.91%)ABNB Airbnb, Inc. 120.88 +0.35 (+0.29%)ETH-USD Ethereum USD 3,398.94 -34.81 (-1.01%)XRP-USD XRP USD 2.28 -0.02 (-1.05%)LMND Lemonade, Inc. 75.02 -0.11 (-0.15%)Top economic events