AMD shares sank more than 17 per cent on Wednesday, despite posting better-than-expected fourth-quarter earnings and a solid first-quarter outlook.
The company saw year-on-year growth in data centre and PC, but the market clearly wanted louder beats in both the quarter and the guidance.
The stock had risen more than 112 per cent in the 12 as the cocaine nose jobs of Wall Street bet it could nick AI share from rival Nvidia, which was up 54 per cent in the same stretch.
AMD reported earnings per share of $1.53 on revenue of $10.3bn, ahead of the Bloomberg consensus for $1.32 on $9.6bn. Revenue was $7.7bn in the same quarter a year earlier.
For the first quarter, AMD said revenue would be $9.5bn to $10.1bn, slightly ahead of the Street’s $9.4bn. Some forecasts were more than $10bn, so the market still found room to sulk.
Microsoft and Meta posted results last week and traders reacted in completely different ways, moaning about Microsoft’s higher spending and slower growth, while cheering Meta even with a huge AI spend jump.
Data centre revenue came in at $5.4bn, topping expectations of $4.97bn. Client revenue hit $3.1bn versus $2.9bn expected, while gaming landed at $843m against an $855m forecast.
AMD, like Troubled Chipzilla, is dealing with the global memory shortage, which could push PC prices up and smash demand, taking a bite out of its PC and gaming lines. That is not the kind of headwind you want when the stock is priced for perfection.
The results landed about a month after AMD chair and chief executive Lisa Su used her CES 2026 keynote in Las Vegas to roll out the new kit. That included the upcoming Helios rack-scale server, which Su described as “the world’s best AI rack”, a not-so-subtle swing at Nvidia.
Helios is built to go head-to-head with Nvidia’s Vera Rubin-powered NVL72 rack-scale system, both of which feature 72 GPUs and support integration into a single large-scale AI system. AMD also talked up its MI500 GPU line, claiming up to a 1,000x AI performance boost versus its older MI300X chips.
Su has said she thinks the AI data centre market will be worth about $1tn by 2030, so AMD has every reason to keep swinging. The problem is that some of the biggest buyers are also becoming rivals, with Google, Amazon, and Microsoft increasing their investments in their data centres.
AMD rolled out new AI PC chips in Las Vegas and teased plans around humanoid robotics, because nothing says focus like trying to do everything at once.
