Advanced Micro Devices (AMD) has announced an estimated gross profit margin of 35% percent for the fourth-quarter of 2017. Although the announcement has revealed a lower profit forecast than anticipated by some analysts, AMD’s share price has seen gains of more than 80 percent over the course of the last 12 months.
Also Read: Microchip Powerhouse TSMC Credits High Performing Quarter to Cryptocurrency Mining
Tuesday’s Announcement Has Resulted in a More Than 13 Percent Drop in AMD’s Share Price
During the company’s Tuesday afternoon earnings call, AMD has revealed an estimated earnings projection that has fallen short of many analysts’ expectations – with the company predicting a 15 percent reduction in sales next quarter. The projections have resulted in AMD’s share dropping by more than 13 percent since Tuesday.
AMD CEO, Lisa Su, expressed her expectation that demand from cryptocurrency miners will begin to taper off this coming quarter. Su stated that the company is “predicting that there will be some leveling off of some of the cryptocurrency demand. As we look at it, it continues to be a factor, but we’ve seen restocking in the channels and stuff like that. So we’re being a little bit conservative on the cryptocurrency side of the equation.”
The Third Quarter of 2017 Was AMD’s Highest Performing Quarter Since 2011
AMD reported that its computing and graphics division generated $819 million in revenue during the third quarter of 2017. The company has stated that the revenue was “primarily driven” by surging demand for its Radeon GPUs and Ryzen desktop processors, which are greatly sought after by many cryptocurrency miners. Sales for AMD’s Vega 56 and Vega 64 GPUs were also noted to have seen a significant increase during this past quarter.
The dramatic surge in global demand for cryptocurrency mining hardware experienced during 2017 comprised a major source of the company’s earnings during the year. AMD has so far seen a 26 percent year-over-year increase in total revenue, despite other sectors of the company posting stagnant growth. Prior to Tuesday’s announcement, the share price of AMD had gone up by approximately 90% during the preceding 12 months.
Do you think that demand for cryptocurrency mining hardware is starting to taper off? Share your thoughts in the comments section below!
Images courtesy of Shutterstock, Wikipedia
Need to calculate your bitcoin holdings? Check our tools section.
No comment yet, add your voice below!