AMD revenue forecast disappoints investors despite strong AI chips sales and China boost
12 Sources
[1]
AMD Outlook Disappoints Investors Seeking Bigger AI Payoff
AMD's shares fell more than 5% in late trading after the results were released, despite the company's fourth-quarter sales rising 34% to $10.3 billion and beating average estimates. Advanced Micro Devices Inc., the main challenger to Nvidia Corp. in the market for artificial intelligence
[2]
AMD forecasts sequential revenue decline, shares fall
Feb 3 (Reuters) - Advanced Micro Devices (AMD.O), opens new tab on Tuesday forecast a slight decline in first-quarter revenue despite an unexpected boost from sales of its AI chips to China, raising doubt about whether it has the supply-chain clout to challenge Nvidia (NVDA.O), opens new tab in the
[3]
AMD's Lisa Su addresses guidance concerns, says demand still accelerating for advanced chips
AMD CEO Lisa Su: AI is accelerating at a pace that I would not have imagined Advanced Micro Devices CEO Lisa Su defended the company's lackluster forecast, telling CNBC on Wednesday that the chipmaker has seen a step up in demand over the last two to three months. Shares tanked 13%
[4]
AMD beats on revenue, earnings as overall sales rise 34% driven by AI
Here's how the chipmaker did versus LSEG consensus estimates for the quarter ended Dec. : For the first quarter, AMD said it expects $9.8 billion in revenue, plus or minus $300 million, versus expectations of $9.38 billion. Net income climbed to $1.51 billion, or 92 cents per share, versus $482
[5]
AMD beats expectations but guidance fails to excite investors and stock falls - SiliconANGLE
AMD beats expectations but guidance fails to excite investors and stock falls Advanced Micro Devices Inc. easily beat Wall Street's expectations in its latest financial results, but although it offered a bullish forecast for the current quarter, it still disappointed some analysts who were
[6]
AMD CEO Lisa Su says AI is 'accelerating at a pace that I would not have imagined'
TL;DR: AMD reported a record $10.3 billion revenue and 54% gross margin in Q4 2025, driven by strong AI demand for EPYC processors and Instinct GPUs. Despite beating estimates, AMD's cautious Q1 2026 forecast led to a 13% stock drop. CEO Lisa Su is now speaking to the media and investors,
[7]
AMD shares fall 13% as dour forecast shows tough competition in AI trade
Advanced Micro Devices shares sank 13% on Wednesday after the company's lackluster sales forecast deepened investor doubts about its ability to take on AI chip bellwether Nvidia. AMD predicted its revenue would fall slightly in the current quarter, even as a resumption of China sales gives an
[8]
AMD CEO Lisa Su Says Company Is Not Forecasting Any China AI Chip Revenue Beyond $100 Million In Q1 Amid Licensing Uncertainty - Advanced Micro Devices (NASDAQ:AMD)
On Tuesday, Advanced Micro Devices Inc. (NASDAQ:AMD) CEO Lisa Su said the chipmaker is limiting its China revenue outlook to $100 million in the first quarter as U.S. export licensing for advanced AI chips remains uncertain. AMD Limits China Outlook During the company's fourth-quarter earnings
[9]
AMD CEO Expects Server CPU Supply Ramp To Help Boost Revenue
'We have increased our supply capacity capability for server CPUs, and that's one of the reasons we're able to increase our [first-quarter] guide as it relates to the server business. And we see the ability to continue to grow that throughout the year," AMD CEO Lisa Su says. AMD CEO Lisa Su said
[10]
The Hidden Driver Behind AMD's Most Bullish 2026 Guidance | The Motley Fool
AMD expects 60% annual data center growth, but GPUs aren't the whole story. Shares of Advanced Micro Devices (AMD +8.32%) took a beating on Wednesday as investors digested the chip company's fourth-quarter report. AMD's results and guidance were generally solid, with revenue soaring 34% year over
[11]
AMD shares fall as data-center sales boom remains months away
Excluding the surprise AI chip sales to China, the company's data-center segment would have missed estimates at a time when longtime rival Nvidia has accustomed investors to blowout forecasts. On a conference call with investors, AMD CEO Lisa Su reiterated that the company expects sales of a new
[12]
AMD falls as dour forecast shows tough competition in AI trade
Advanced Micro Devices shares sank 13 per cent on Wednesday after the company's lackluster sales forecast deepened investor doubts about its ability to take on AI chip bellwether Nvidia. AMD predicted its revenue would fall slightly in the current quarter, even as a resumption of China sales gives
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AMD reported fourth-quarter earnings that beat Wall Street estimates with revenue rising 34% to $10.3 billion, driven by its data center business and AI chip sales. But the company's first-quarter revenue forecast of $9.8 billion, while above consensus, fell short of some investor expectations who sought bigger AI gains. Shares tumbled 13% as concerns emerged about AMD's ability to compete with Nvidia in the booming AI market.
AMD Fourth-Quarter Earnings Beat Expectations But Stock Tumbles
Advanced Micro Devices reported fourth-quarter earnings that surpassed Wall Street projections, yet shares plunged 13% as the company's revenue forecast failed to meet heightened investor expectations for AI-driven growth
1
. The chipmaker posted fourth-quarter earnings of $1.53 per share, excluding certain costs, beating analyst estimates of $1.32 per share4
. Revenue climbed 34% year-over-year to $10.3 billion, exceeding the $9.7 billion average estimate1
. Net income surged to $1.51 billion from just $482 million in the year-ago period5
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Source: Benzinga
The share price decline reflected a disconnect between AMD's solid performance and investor expectations that have been shaped by Nvidia's pattern of delivering blowout forecasts. "The expectations for large blowout quarters for AI-related hardware companies have skewed what the market is looking for," said Bob O'Donnell, president of TECHnalysis Research
2
.Data Center Business Shows Strong Growth Amid AI Demand
AMD's data center business, the primary beneficiary of surging AI infrastructure spending, generated $5.38 billion in revenue during the fourth quarter, up 39% from the previous year
1
. This figure beat analyst predictions of $4.97 billion1
. The growth was driven by demand for both the company's GPUs used in AI workloads and its EPYC central processing units deployed in data centers5
.CEO Lisa Su emphasized that fiscal 2025 was a defining year for AMD, with the company achieving record revenue thanks to broad-based demand for its AI platforms, particularly the Instinct MI300 series graphics processors
5
. Su defended the guidance in a CNBC interview, stating that demand for advanced chips continues to accelerate. "What I would tell you from someone on the inside is AI is accelerating at a pace that I would not have imagined," she told CNBC's "Squawk on the Street"3
.
Source: BNN
AI Chip Sales to China Provide Unexpected Revenue Boost
AMD recorded an unexpected $390 million in AI chip sales to China during the fourth quarter from its MI308 chips, helping to offset concerns about export controls
4
. The company expects approximately $100 million in additional China sales during the current quarter1
. These sales came after AMD received licenses to sell modified versions of its MI300 series following Trump administration restrictions on advanced chip exports to Beijing2
.However, the China sales presented a double-edged sword for AMD. While they boosted overall revenue, excluding the MI308 sales would have resulted in data center revenue of $4.99 billion, below Wall Street estimates of $5.07 billion
2
. This raised questions about the underlying strength of AMD's core AI business and its ability to compete with Nvidia in the booming AI market.Revenue Forecast Shows Sequential Decline Despite Year-Over-Year Growth
For the first quarter, AMD projected revenue of approximately $9.8 billion, plus or minus $300 million, compared to analyst consensus estimates of $9.39 billion
1
. While this represents year-over-year growth of approximately 32%, it indicates a sequential decline of roughly 5% from the fourth quarter2
. Some analyst projections had topped $10 billion, contributing to the market's disappointment1
.The sequential sales drop particularly troubled investors who have grown accustomed to continuous growth trajectories in the semiconductor industry. "Tuesday's after-hours share fall could be attributed to AMD's expectations of a sequential sales drop," said Ben Bajarin, Chief Executive of Creative Strategies
2
. When stripping out the China sales that Wall Street did not anticipate, the low end of AMD's forecast range was $9.4 billion, barely above analyst estimates2
.Related Stories
Client Segment and Gaming Segment Drive PC Market Share Gains
Beyond its data center operations, AMD's client segment and gaming segment delivered strong performance with $3.9 billion in sales during the fourth quarter, up 37% year-over-year
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. The growth was fueled by demand for AMD's Ryzen processors for laptops and PCs, with the company continuing to capture market share from longtime rival Intel5
. Personal computer-related sales specifically rose 34% to $3.1 billion, beating the average prediction of $2.89 billion1
.Supply Chain Constraints and Competitive Pressures Loom
The semiconductor industry faces ongoing challenges including a global shortage of High-Bandwidth Memory (HBM), which accompanies AI processors made by both AMD and Nvidia
2
. Memory supply constraints could hamper growth despite strong demand, according to HSBC analysts2
. While Intel has struggled with supply constraints due to its in-house production, analysts expected AMD to face fewer such issues since it outsources manufacturing to Taiwan's TSMC2
.
Source: Reuters
To better compete with Nvidia, AMD has accelerated its AI product launches and is moving beyond selling individual chips to offering complete AI systems. The company plans to ship Helios, a new integrated server-scale AI system featuring dozens of MI455X chips, later this year
5
. Su indicated the company is holding "active discussions" with customers over additional Helios sales5
. AMD has also secured major deals with OpenAI and Oracle, which are expected to generate tens of billions of dollars in annual revenue2
. The OpenAI agreement gives the startup the option to purchase up to roughly 10% of AMD2
.References
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