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- AMD is set to report its fourth-quarter results following Tuesday’s closing bell.
- Shares have fallen more than 10% since rival Nvidia warned on Monday morning that conditions in China had led to an “extraordinary, unusually turbulent” quarter.
- One analyst says AMD is behind Nvidia in working through inventory issues.
- Watch AMD trade live.
AMD shares were down 3% Tuesday morning as traders position themselves for the company’s fourth-quarter earnings, which are set to be released after the closing bell.
Its shares had already tumbled 8% on Monday after its rival Nvidia warned that conditions in China had led to an “extraordinary, unusually turbulent” quarter. Nvidia cut its revenue outlook for the fourth quarter to roughly $2.2 billion, down from about $2.7 billion.
And one Wall Street analyst says the warning from Nvidia is likely a sign of things to come from AMD.
“While the other shoe has dropped at NVIDIA, we think AMD is further behind in working through its GPU inventory issues,” said Susquehanna International Group analyst Christoper Rolland.
“For AMD, we note evidence of continuing retail price declines suggesting its graphics card channel has yet to clear. Additionally, we note Street expectations for Computing and Graphics in 1Q19 of +3% that are well above typical seasonality (we would not be surprised to see a mid-single digit decline or even worse here). With the additional negative commentary describing a deteriorating macro picture and Chinese gaming at NVIDIA, we continue to believe that AMD is at significant risk of a miss in 4Q18/1Q19.”
Wall Street analyst surveyed by Bloomberg are expecting adjusted earnings of $0.08 a share on revenue of $1.44 billion.
AMD shares were up 7% this year including Tuesday’s selling. They gained 68% last year.
Read more:
‘The other shoe has dropped’: Here’s what Wall Street is saying about Nvidia’s warning
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