AMD falls as investors seek bigger AI payoff

Aug 5 (Reuters) - Advanced Micro ‌Devices shares ​declined ​before the bell on Wednesday as the chipmaker's stronger-than-expected revenue forecast fell short of lofty expectations and investors ‌sought clearer signs that a multibillion-dollar AI spending boom ⁠will translate into faster growth.

The shares were last down 7.4% at $480.28, set ‌to wipe out about $61.1 billion ‌from AMD's market value.

The move underscores elevated expectations facing AMD as it aims to challenge Nvidia's dominance amid intensifying competition ​with Intel racing to regain technology leadership after strong results.

"We suspect expectations had moved higher following Intel’s results a ⁠couple of weeks ago, and the buyside already has a fairly bullish outlook," said ​Stacy Rasgon, analyst at Bernstein.

Analysts at TD Cowen called AMD's results and forecast "objectively good" but said the ​stock was facing a "very high bar" ‌following recent AI-related customer announcements and the sharp rally in the shares.

The Santa Clara, California-based company forecast ⁠third-quarter revenue of about $13 billion, plus or minus $300 million, above analysts' estimates of $12.52 billion, according to data compiled by LSEG.

Investors have more than ⁠doubled AMD's stock this year on expectations that the company will emerge ​as the leading alternative to Nvidia in AI chips, raising the bar for quarterly results.

Chief Executive Lisa Su said AMD expects data-center revenue to ‌more than double by 2027 and projected total revenue growth above its previously outlined target of ‌more than 35%. AMD's data-center revenue more than doubled to $6.72 billion, ⁠topping expectations.

Last month, the company ‌signed deals with ​Anthropic and Core Scientific to bolster its AI infrastructure ambitions.

(Reporting by Rashika Singh in Bengaluru; Editing by ‌Mrigank Dhaniwala)

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