AMD $AMD ( ▼ 17.31% ) delivered better-than-expected results and upbeat guidance, but the stock fell anyway. Investors appear less impressed with the headline numbers and more focused on what they did not see: big new customer wins and clean, margin-driven growth.
When expectations shift from “beat” to “prove dominance,” good is not always good enough.
China Sales Did the Heavy Lifting
AMD’s data center revenue came in above estimates, but a key chunk of that strength came from unexpected sales of MI308 AI chips to China. Roughly $390 million of the segment’s revenue was tied to those shipments.
That raised eyebrows. After Nvidia signaled that demand for its comparable China-focused chips had not materialized as hoped, investors were not expecting China to be the swing factor behind AMD’s data center beat. Without that contribution, growth would have looked far more in line with expectations.
Where Are the Big New Customers
In today’s AI market, investors want splashy announcements about major hyperscaler deals and new platform adoptions. AMD’s management did not provide any headline-grabbing customer wins on the call.
Analysts noted that while AMD said it would not announce every new customer, the absence of a big reveal stood out. After its high-profile deal with OpenAI, many expected a cascade of additional large buyers. So far, that wave has not been clearly visible.
Expenses Are Still Running Hot
Another concern is cost control. Analysts pointed out that operating expenses ran well above guidance, offsetting better-than-expected gross margins. That has become a pattern, raising doubts about how quickly AMD can translate AI revenue growth into stronger operating leverage.
With new AI products ramping later this year, there is also risk that margins could come under pressure again before scale benefits fully kick in.
Great Numbers, Tough Setup
Some analysts were surprised by the stock’s weakness, noting that the reported figures and product commentary were solid. But AMD $AMD had been on a strong run heading into earnings, outperforming many peers.
Against that backdrop, investors appear to be demanding clearer proof that AMD can consistently win major AI customers and expand margins, not just deliver one-off beats. Until that confidence builds, even good quarters may struggle to push the stock higher.