(Reuters) – Advanced Micro Devices and Super Micro Computers on Wednesday sold off their chip stocks after investors who had flocked to the sector on hopes that increased AI investment would boost demand were disappointed with the results. led.
AMD is expected to drop 5.4%, losing more than $13 billion in market value.
The company's forecast of $4 billion in AI chip sales in 2024 fell short of the lofty expectations of Wall Street, which has grown accustomed to Nvidia's lofty forecasts over the past year.
Super Micro Computer's stock price has risen nearly 200% this year, outpacing Nvidia's rise, but third-quarter sales fell short of expectations amid questions over the profitability of new server products. , which fell more than 11%.
Russell Hackman said: “The market has turned risk-off in recent days, so it's not surprising that these companies are getting hot right now, unless they're a mile ahead of earnings.” said. President of Hackman Wealth Partners.
AMD and Super Micro Computer executives said supply constraints were hampering efforts to capitalize on demand for equipment supporting the generative AI boom.
“Taking a step back, AMD has multiple customers that are rapidly ramping up MI300 (AI chips), which is putting some stress on the supply chain,” TD Cowen analysts said.
“But from a demand perspective, customer engagement has actually increased, not only with MI300X but also with its successors.”
Other AI-related chip companies also fell, with Marvell Technology falling 1.5% and Nvidia falling 1.7%.
The company's stock has significantly outperformed the benchmark S&P 500 index this year, driving an 11% rise in the Philadelphia Semiconductor Index.
Some analysts remain positive on AMD, saying the company could increase its share of the AI chip market and earn billions of dollars in revenue once supply chain constraints ease.
At least 10 analysts lowered their price targets for AMD, and eight raised their views, according to LSEG data. Super Micro has raised its price target three times and lowered it twice.
(Reporting by Harshita Mary Varghese; Additional reporting by Shashwat Chauhan in Bengaluru; Editing by Krishna Chandra Eluri)
