Despite a solid earnings report last week, shares of Advanced Micro Devices slipped by almost 4% during the most recent after-hours trading and was down by more than 7% during the most recent trading session.
Initially, shares of AMD surged following positive comments from analysts regarding its recent performance during the fourth quarter which was revealed during its earnings call. AMD announced solid performance among the sales of its products including the highly in-demand GPUs and other computing and gaming products.
Shares of AMD have surged at the beginning of the year when news regarding processors from rival company Intel revealed to have been affected with a fundamental design flaw that threatened the security of Intel users and their personal information being at risk of being used for malicious purposes. AMD initially announced that it was not affected by the said issue.
However, shares of AMD slipped following a direct announcement from the company that its products may be affected by the recent Spectre and Meltdown vulnerability. According to AMD, its efforts in preventing and addressing such vulnerabilities may be costly and may only be partially effective to no success at all.
Strong Fourth Quarter Earnings
The American technology company posted a fourth-quarter earnings report last week that beat most Wall Street estimates. The company had a net income of 6 cents per share to $61 million for the fourth quarter compared to their losses of $51 million during the during the same quarter a year ago.
AMD’s revenue also rose from $1.11 billion to $1.48 billion from the same quarter last year following a growth in the performance of their computing and graphics segment including sales from graphics processing units and personal computers with their units growing by 60% to $958 million year over year beating most expectations of $862.5 million. Other Wall Street analysts initially had expectations of the company posting an overall fourth-quarter revenue of $1.41 billion. Revenues if the company from their Enterprise, Embedded, and Semi-custom also rose from $506 million last 2016 to $522 million.
Shortly after the release of the earnings report, shares of the GPU manufacturer declined by as much as 5% before recovering by 2% and closing 3.4% lower during the regular trading session after some analysts brought up the possibility of other security issues in the future affecting even AMD products after the recent issues that Microsoft and Intel have experienced over the year.
AMD shares have gained almost 26% this year and have been mostly down since its earnings report last week. AMD chief executive officer Lisa Su expects continuous growth on its computing and graphics segment due to the cryptocurrency demand while it addresses the possible security issues it may face regarding the aforementioned vulnerabilities.
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