) in the computer processor market, provided a less optimistic revenue forecast for the current quarter. The company cautioned that demand for gaming machines is slowing, which had an impact on its stock performance.
Even as the gaming sector posed challenges in Q3, AMD demonstrated its innovative edge and market agility with the recentEmbedded revenue also declined, falling 4.6% YoY to $1.24 billion, below the expected $1.31 billion. These misses were offset by Client revenue, the segment which rose 42% YoY and easily topped the expected $1.23 billion. The Client segment includes sales from PC processors.
AMD’s adjusted gross margin expanded by 100 basis points YoY to 51%, in line with expectations. The adjusted operating margin, on the other hand, declined by 100 bps to 22%, better than the expected decline to 21.6%. Revenue was impacted by the softening demand for semi-custom chips, which are for example used to power Sony’s PlayStation 5. AMD said the sales decline was expected to a certain extent given that we are now in the fourth year of the console cycle.
The management said it has secured commitments from multiple large hyperscale customers to deploy its Instinct MI300 accelerators, which are based on the latest ROCm software suite.