What's going on?

AMD�s watery results suggested the firm has sprung a leak.

What does this mean?

Things are looking pretty grim for the chip industry, what with the economy sliding and demand for tech products on the ebb. And even the gizmos that are being built aren�t much help: after all, many manufacturers have store-rooms chock-full of chips, so they�re wisely working through those instead of ordering more. That makes for a pretty hard-hitting punch, and it left AMD�s results seriously bruised. The damage included a 65% plunge in sales for the firm�s PC business compared to the first quarter last year. And there was little to soothe the pain: AMD�s sluggish data center and gaming segments barely budged � meaning the beat-up firm saw its first drop in quarterly revenue since 2019. That news, plus AMD�s equally underwhelming outlook, meant that shares took a dive of 6%.

Why should I care?

The bigger picture: Better late than never.
AMD’s not alone in feeling the burn: rival Intel also had a pretty rough go of it last week. But both firms reckon the chip market’s just about bottomed out, and they’re expecting a rebound in the second half of the year. In the meantime, AI is where the action is: Nvidia�s leading the pack in producing those chips, and its stock’s been outperforming both AMD and Intel this year. And sure, AMD might be late to the party � but it�s betting its new AI chips will start making waves by the end of 2023.

Zooming out: Getting schooled.
Nobody loves AI as much as lazy students, so it�s no surprise the education sector’s getting a shakeup. US firm Chegg � which offers on-demand homework solutions � warned that ChatGPT’s been stealing its thunder lately. That sent its shares plunging this week, and the ripple effect meant that shares in Pearson, Duolingo, and Udemy were rattled too.