Advanced Micro Devices reported record fourth-quarter revenue of $10.27 billion and crushed profit expectations, yet investors punished the AMD stock with a 9% premarket plunge on Wednesday.
The investors reacted sharply as the management’s Q1 guidance of $9.8 billion (±$300 million) fell short of Wall Street’s inflated AI boom expectations.
The paradox is stark with stronger fundamentals and a weaker stock price, revealing that after months of frothy speculation, the market is now pricing in execution risk and timing uncertainty.
AMD stock: Numbers that should have boosted share price
AMD posted Q4 earnings per share of $1.53, beating consensus by $0.21, while revenue of $10.27 billion topped estimates by $630 million.
Full-year 2025 revenue hit a record $34.6 billion, up 34% year-over-year, powered largely by data center demand.
The company’s non-GAAP gross margin expanded to 57%, lifted by both strong product mix and a $360 million inventory reserve release on MI308 chips.
From almost every angle, this was a blowout quarter, yet Wall Street sold first and asked later.
The selloff reflects a familiar market dynamic, as when sky-high expectations meet even stellar results, disappointment persists.
Analysts at flagged a crucial detail: AMD’s surprise $390 million in China shipments during Q4 had not been baked into street estimates.
This means the underlying beat was narrower than headline numbers suggested.
More importantly, the Q1 guidance lacked the aggressive acceleration Wall Street was expecting amid the hype surrounding the company’s AI customer wins.
Converting gigawatt deals into revenue
The market’s confusion speaks to a deeper anxiety: can AMD actually deliver on its mammoth AI commitments?
The company boasts two major agreements that sound transformational in the abstract but feel increasingly uncertain in execution.
OpenAI will deploy up to 6 gigawatts of AMD Instinct GPUs across multiple generations, with an initial 1 gigawatt rollout of MI450 chips scheduled for the second half of 2026.
Oracle will deploy 50,000 MI450 Instinct GPUs via AMD’s Helios rack architecture beginning in Q3 2026, expanding into 2027.
On paper, these deals represent tens of billions in potential revenue.
In reality, they are filled with execution and supply-chain risk. Hardware deployment timelines slip.
Customer adoption curves rarely match initial guesses. And both OpenAI and Oracle remain critically dependent on AMD’s ability to scale production and secure HBM (high-bandwidth memory) supply.
Nvidia seems the safer bet
The selloff also reflects lingering wariness about AMD’s competitive position against Nvidia, which announced its next-generation Rubin platform at CES with first systems due in H2 2026.
Nvidia commands roughly 92% of the AI chip market, anchored by deep ecosystem moats.
AMD’s Q1 guidance of $9.5–$10.1 billion (midpoint $9.8 billion) still implies solid 32% year-over-year growth.
But for a stock that’s rallied over 100% over the past year, partly on AI euphoria, the reality check seems a bit harsh.
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