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The road to AI is not always smooth!

Performance issues have once again "struck" the AI ​​industry. On August 7, before the US stock market opened, the AI ​​monster stock - AMD fell nearly 12%. It is worth noting that after the US stock market closed on Tuesday, AMD's stock price fell by more than 13% due to performance that fell short of market expectations.

On the news front, AMD's latest financial report shows that in the fourth quarter of fiscal 2024 (ending June 30), the company's adjusted earnings per share were US$6.25, far lower than analysts' expectations of US$8.07; the gross profit margin was 11.2%, far lower than 15.5% in the previous quarter and lower than analysts' expectations of 14.1%.

The sharp drop in AMD's stock price also affected other AI concept stocks. After the U.S. stock market closed that day, AMD's "partner" Nvidia fell by more than 2.5%, while ARM, TSMC, Micron Technology, Broadcom and others all fell by nearly or more than 2%.

Investors are concerned about the long-term profitability of AI-optimized servers sold by companies such as Super Micro, Dell Technologies and HP Inc., analysts said, and Super Micro’s failure to meet its own profit targets in the most recent quarter may have exacerbated those concerns.

Performance explosion