Advanced Micro Devices (AMD:NSD) recently reported its financial results for the fourth quarter of 2022, and the numbers indicate a mixed bag for the company. While the data center and embedded chip segments recorded growth, the client segment, which includes PC and notebook sales, experienced a significant year-over-year (YoY) drop of 51%.
The drop in the client segment’s revenue can be attributed to the oversupply of tech and a longer technology replacement cycle, which has led to a fragile PC and notebook market. AMD’s inventory levels have also been a concern, as the company continues to produce more chips than it sells, leading to significant inventory growth and the client segment moving to an operating profit loss.
Despite the challenges in the client segment, AMD’s data center and embedded chip segments showed YoY growth. The growth is expected to continue, with industry experts forecasting that the two segments will experience further growth in the coming years.
However, the news is not encouraging for those looking to invest in AMD’s stock. Industry analysts predict that the client segment is unlikely to recover until mid-2023, and the current situation in the PC and notebook market remains fragile. Given the high-tech oversupply and longer technology replacement cycle, analysts believe that it is not the right time to buy AMD stock.