AMD’s "Weakened PC Market"

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AMD’s "Weakened PC Market"

Shares of Advanced Micro Devices (Nasdaq: AMD) dropped 4.51% in after-hours trading on Thursday after the technology company posted preliminary revenue results.

Revenue Miss: The company expects revenue to be $5.6 billion, which is a 29% year-over-year increase, but lower than the prior outlook of $6.7 billion.

PC Problems: AMD blamed weaker client segment revenue from reduced processor shipments, a weaker-than-expected PC market, and inventory corrections across the PC supply chain.

Gross Margin Miss: Non-GAAP gross margin is expected to be 50% instead of 54%. AMD blamed lower revenue on lower client processor unit shipments.

Quote: “The PC market weakened significantly in the quarter...Macroeconomic conditions drove lower than expected PC demand and a significant inventory correction across the PC supply chain.” - AMD Chair and CEO Dr. Lisa Su.

Good News: Despite the problems, revenue for data centers, gaming, and embedded solutions grew significantly and was in line with expectations.

Stock Price: AMD’s stock is down 54% this year, including 14% in the past 30 days.

Final Thoughts: It’s been a tough market for PCs. AMD reports earnings on November 1.

Notables

Notable Earnings Today: Tilray (Nasdaq: TLRY), Matrix Service Company (Nasdaq: MTRX).

Notable IPOs Today: Alopexx, Inc. (Nasdaq: ALPX), Castellum, Inc. (NYSEAMERICAN: CTM).

Notable Equity Crowdfunding Campaigns Ending Today: Brady’s Bakery (Mainvest), Tipsy Lady (Mainvest).

Notable Economic Events Today: Unemployment Rate (8:30 a.m. ET), Nonfarm Payrolls (8:30 a.m. ET), Labor Force Participation Rate (8:30 a.m. ET).

Levi Strauss Supply Chain Woes

Shares of Levi Strauss (NYSE: LEVI) dropped 6.34% in after-hours trading on Thursday after the clothing company posted mixed financial earnings results.

Financials: Levi Strauss reported earnings of 40 cents per share, which was better than expected. Revenue hit $1.5 billion, which was lower than expected.

Currency Problems: Net revenues grew 1% in the quarter, but it would have been higher if not for global currency headwinds. The gross margin was 56.9%, which was lower than expected.

Supply Chain Issues: Levi Strauss missed out on sales of $30 to $40 million, or 2% to 3% of growth, due to continued supply chain disruption, mostly in the U.S.

Be Direct: A bright spot for Levi Strauss was the direct-to-consumer business, which grew during the quarter. There were increases across the U.S., Asia, and Latin America.

Final Thoughts: Levi Strauss' stock is down 35% this year. The company hopes that its ability to control discretionary spending will help it survive these macroeconomic challenges.

Biden Marijuana Pardon Boosts Cannabis Stocks

On Thursday, President Joe Biden pardoned all those convicted of prior federal charges of simple marijuana possession.

Final Thoughts: The announcement was great for cannabis stocks. Aurora Cannabis (Nasdaq: ACB) shot up 7.26% and Tilray (Nasdaq: TLRY) increased by 30.87%.

Trends to Watch

Bitcoin’s Golden Rule: Bitcoin’s Correlation With Gold Hits Highest Level in Over a Year (CoinDesk)

Wishful Thinking: Inflation is going to fall just as fast as it rose, and that’s investors’ cue to enter the stock market (MarketWatch)

Doomsday: IMF warns of higher recession risk and darker global outlook (AP News)

Selfish: Celsius Execs Cashed out at Least $17 Million in Crypto Before Halting Withdrawals for Customers (Gizmodo)

Gen Z Can’t Save You Now: TikTok Parent ByteDance Sees Losses Swell in Push for Growth (The Wall Street Journal)

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