AMD $AMD ( ▼ 17.31% ) just delivered a strong quarter and upbeat guidance, but the stock slid anyway. The chipmaker topped Wall Street’s expectations on both revenue and earnings and projected solid sales for the current quarter, yet investors appeared more focused on sustainability than the headline beat.
Welcome to earnings season in the AI era.
Q4 Was a Clear Win
AMD reported fourth-quarter revenue of $10.27 billion, well above the $9.65 billion estimate and ahead of its own guidance range. Adjusted earnings per share came in at $1.53, comfortably topping expectations of $1.32.
Part of that strength came from renewed shipments of AI chips to China. AMD generated $390 million in Q4 from sales of its MI308 processors there, giving results an extra boost.
Q1 Outlook Stays Strong
For the current quarter, AMD expects revenue of about $9.8 billion, plus or minus $300 million, again above consensus. The company also guided for an adjusted gross margin of 55%, slightly higher than Wall Street was modeling.
That forecast includes about $100 million in MI308 sales to China, showing that export channels, while limited, are still contributing to the AI revenue story.
The Bigger Debate Is About AI Staying Power
Despite the beat, shares dropped after hours as investors weighed how durable AMD’s AI momentum will be. While Intel has flagged supply constraints that could help AMD gain CPU market share, the main long-term driver remains AI infrastructure demand.
CEO Lisa Su has previously said AMD could deliver more than 35% annual revenue growth over the next three to five years, with data center growth exceeding 60%. Those are massive targets, and the market is clearly asking how much of that upside is already priced into AMD $AMD today.