The big picture: A reputable analyst recently lowered his revenue estimates for AMD's consumer CPU, GPU, and gaming console divisions for 2023. It makes sense that consumers will cut down on non-essential spending, such as high-end electronics, considering the increasing inflation rate and the ongoing war in Ukraine. Meanwhile, AMD's server revenue could continue to climb at an impressive rate.
According to analyst Gus Richard, AMD's desktop and laptop CPU revenue will decline by 6 percent year-over-year in 2023, while consumer GPU sales will be down by 7 percent. In total, this market segment will net the company about $675 million less than this 2022.
Friendly reminder, the PlayStation 5 and the Xbox Series X/S are all powered by AMD SoCs. Richard estimates that the company's game console revenue will only rise by $400 million, or about 8 percent YoY. This figure is significantly lower than his previous forecast, which mentioned a $740 million growth.
Meanwhile, Xilinx revenues would decline by 6 percent next year. AMD completed the acquisition of the semiconductor company, which mainly sells FPGAs and CPLDs.
AMD's enterprise revenue could fare far better though, growing by 55 percent YoY, or about $3.1 billion. Richard claims that AMD's EPYC server CPUs will be "at the top of the stack next year," helping mitigate the impact of declining sales in its other market segments.
The analyst also slightly adjusted his price target for AMD's shares from $97 to $95. The company's stock price is currently sitting at $73 after dropping by about 30 percent in the past month.
Earlier this week, we learned that AMD, Apple, and Nvidia are planning to cut their wafer orders from TSMC due to lower consumer demand for high-end electronics.