AMD Stock Drops as Market Questions Outlook
Shares of Advanced Micro Devices fell sharply after the company reported quarterly results, as investors focused on guidance that some viewed as conservative despite ongoing strength in artificial intelligence spending.
The stock slid roughly 15% in Wednesday trading, overshadowing a fourth-quarter earnings beat and renewed optimism from management around accelerating demand for advanced chips.
Lisa Su: AI Demand Is “Going Gangbusters”
CEO Lisa Su defended the company’s outlook, emphasizing that internal demand signals remain strong — particularly in data centers.
She said AMD has seen a noticeable step-up in demand over the past two to three months, with enterprise customers rapidly increasing compute capacity for AI workloads. According to Su, demand continues to outstrip available compute resources.
The company’s data center business accelerated from the fourth quarter into the first, driven by rising adoption of AI across enterprise and cloud environments.
Guidance Misses Elevated Expectations
AMD reported fourth-quarter results that topped Wall Street estimates, but its first-quarter revenue forecast came in at $9.8 billion, plus or minus $300 million. While the midpoint exceeded consensus expectations, some investors were positioned for a significantly stronger outlook given the scale of recent AI-related capital spending across the industry.
The bar was particularly high following AMD’s recent momentum, including major partnerships announced late last year with OpenAI and Oracle, as well as broader hyperscaler data center expansion.
Second-Half Inflection in Focus
Su pointed to the second half of the year as a key inflection point, as AMD begins shipping its new integrated, server-scale AI system known as Helios.
She said the product launch remains on track and is expected to meaningfully contribute to growth as customers scale AI deployments beyond pilot phases and into production environments.
WSA Take
The market reaction reflects expectations, not fundamentals.
While investors were looking for an even more aggressive near-term forecast, management’s commentary suggests underlying AI demand continues to build — not slow. With a major platform launch scheduled for the second half, AMD’s selloff appears driven more by positioning and elevated expectations than by deterioration in demand.
For long-term AI infrastructure investors, the message from AMD’s leadership is clear: compute demand is still accelerating — even if the stock chart says otherwise.
Disclaimer
WallStAccess is a financial media platform providing market commentary and analysis for informational and educational purposes only. This content does not constitute investment advice, a recommendation, or an offer to buy or sell any securities. Readers should conduct their own research or consult a licensed financial professional before making investment decisions.
