AMD beats estimates after Intel's slide rattled Seoul chips

Two big US chipmakers reported this week, and outlets measured AMD’s numbers against Intel’s. AMD beat estimates on Nov 3, while Seoul’s chip-heavy market swung over several sessions that outlets tied first to Intel’s report and slump, then to gains in US chip stocks.

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AMD beats estimates with data centers in front

AMD released its third-quarter results after the US market closed on Nov 3, and they came in above Wall Street’s expectations, The Wall Street Journal reported. The Journal said the company tilted further toward data centers, the server business behind AI and cloud computing, as its main business.

Data-center revenue nearly doubled in the quarter, CNBC reported, and the stock rose 7% after the report. About 40 minutes before that figure, an earlier CNBC video had called the after-hours gain slight.

The outlook drew attention too. AMD’s revenue forecast for the current quarter came in ahead of analysts’ estimates. Bloomberg linked that to strong demand for AI chips, while Reuters pointed to faster growth in data centers. AMD also took a $1 billion charge in the quarter tied to its chip deals with OpenAI and Meta, Reuters reported.

Matt Bryson, an analyst at Wedbush, said he saw no data-center weakness at AMD and that the results met the bar, according to CNBC and Bloomberg.

The mood going in was tense. Ahead of the release, Bloomberg wrote that AMD needed a very strong outlook to escape Intel’s fate as worries over AI spending mounted. CNBC said the shares had been under heavy pressure before the numbers came out.

In the regular session on Nov 3, before the report, AMD closed at US$483.90, up 3.65%. The PHLX Semiconductor Index (SOX), a gauge of US chip stocks, gained 2.63% that day to 10,600.40. After the results, S&P 500 futures edged higher while traders also waited for the US midterm election results, CNBC reported.

Seoul whipsaws from Intel’s slide to US chip gains

On Nov 2, the KOSPI opened lower after Intel’s shares dropped steeply on Wall Street, with Samsung Electronics and SK hynix weak, Chosunbiz reported. Chosunbiz said the index lost more than 1% early. The Korea Herald put it down 51 points, or 0.89%, at 5,679.74 at 9:15 a.m.

In US trading the previous Friday, the S&P 500 dropped 1.82% as weak quarterly reports from Intel and Amazon deepened doubts about AI spending, The Korea Herald reported. Intel’s shares closed at US$60.55 on Nov 3, 7.92% below their Oct 30 close of US$65.76, a move spread over two sessions. The SOX slipped 0.83% over the same two sessions.

Seoul turned around later on Nov 2. Chip shares led the KOSPI into positive territory, Chosunbiz and The Chosun Daily reported, with net purchases by pension funds and other institutions while retail and foreign investors were net selling. The Chosun Daily also tied the rebound to views that Korean shares were priced too low. The index closed that day at 5,859.08.

The next session wiped that out. The KOSPI dropped 3.59% on Nov 3, with Samsung Electronics and SK hynix in the lead, amid net selling by foreign investors and worries about the AI industry, The Chosun Daily reported.

On Nov 4, the market opened sharply higher. The KOSPI stood 124.21 points, or 2.2%, higher at 5,773 at 9:15 a.m. as investors waited for US midterm results, The Korea Herald reported. The Chosun Daily put the early gain at 2.43%, with Samsung Electronics and SK hynix up sharply after advances in Nvidia and Micron. Overnight, the Nasdaq added 0.83%, the S&P 500 0.36% and the PHLX chip index 2.63%, according to The Korea Herald.

Much of the early rally faded. The KOSPI closed Nov 4 at 5,683.80, up 0.62% on the day. That left it 2.99% below its Nov 2 close, over two sessions.

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Information only, not investment advice.