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AMD shares plummet after the chip giant gives weak guidance

Heidi Chung
·Reporter

Advanced Micro Devices (AMD) reported better-than-expected third quarter earnings, but the company released weak guidance.

ā€œFor the fourth quarter of 2018, AMD expects revenue to be appropriately $1.45 billion, plus or minus $50 million, an increase of approximately 8 percent year-over-year,ā€ the company said in a statement.

That $1.45 billion compares to $1.6 billion expected by analysts.

AMD shares tanked more than 15% in early trade on Thursday.

The chipmaker’s Q3 earnings came in at 13 cents per share, which was just a penny above the 12 cents per share that was expected by analysts polled by Bloomberg. Revenue was roughly in line with analyst estimates at $1.7 billion.

ā€œWe delivered our fifth straight quarter of year-over-year revenue and net income growth driven largely by the accelerated adoption of Ryzen, EPYC and datacenter graphics product,ā€ AMD President and CEO Lisa Su said.

The stock has soared nearly 130% this year, but has fallen 33% from its September highs as of market close.

Chip stocks are often looked to by investors as a proxy for the overall health of the global economy. The Philadelphia Semiconductor Index, of which AMD is a component, has gotten crushed over the past month – falling 12%. The group had its worst day since October 10, 2014 on Wednesday.

Heidi Chung is a reporter for Yahoo Finance. Follow her on Twitter: @heidi_chung.

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