"Wall Street's Tougher Standards"...AMD Falls 8% Despite Strong Earnings

AMD Delivers Strong Q4 Revenue
Q1 Guidance Also Beats Expectations
Concerns Rise Over Inclusion of China Sales

Su Lisa, CEO of Advanced Micro Devices. Yonhap News

Advanced Micro Devices (AMD), which is competing with Nvidia for the top two spots in the artificial intelligence (AI) semiconductor market, saw its share price fall by about 8% in after-hours trading despite reporting results that beat expectations.

On the 3rd (local time), AMD announced in a filing after the market close that its revenue for the fourth quarter of last year (October to December) rose 34% year-on-year to 10.27 billion dollars (about 14.9 trillion won). This exceeded the 9.67 billion dollars forecast compiled by market research firm LSEG.

Data center revenue led the company’s growth, rising 39% year-on-year to 5.4 billion dollars. The client and gaming segment also increased 37% over the same period to 3.9 billion dollars. However, embedded segment revenue came in at 950 million dollars, up only 3% from a year earlier. Adjusted earnings per share (EPS) were 1.52 dollars, beating the market consensus of 1.32 dollars.

Looking at the full year, total revenue last year was 34.639 billion dollars, up 34% from 2024, and EPS was 4.17 dollars. AMD’s guidance for the first quarter of this year also exceeded market expectations. The company projected first-quarter revenue of 9.8 billion dollars, higher than Bloomberg’s forecast of 9.38 billion dollars.

Despite the stronger-than-expected results, the share price plunged. The stock closed the regular session at 242.11 dollars, down 1.69%. Even though Chief Executive Officer (CEO) Su Lisa and other members of management continued to emphasize their optimism about AI during the earnings conference call after the close, the share price was down by more than 8% as of 9:16 a.m. on the 4th (Korea time).

U.S. financial media outlet CNBC analyzed that, amid the AI investment boom, investors’ expectations for even stronger guidance weighed on the stock. The Wall Street Journal (WSJ) also reported that investors have recently been applying stricter standards to AI-related stocks, and that there have been repeated cases where share prices fall even when companies deliver results that beat expectations.

Concerns have also been raised over the fact that AMD’s latest results include revenue from China. Due to U.S. export controls, it is uncertain whether AMD will be able to supply AI chips to China on a stable basis. The company shipped its MI308 chips to China in the fourth quarter of last year, generating 390 million dollars in revenue. It said it expects related revenue in the first quarter of this year to reach about 100 million dollars. However, CEO Su, apparently mindful of market concerns, said China would not be reflected in the company’s long-term guidance, explaining that “China is a very fluid situation.”

Meanwhile, Nvidia, the leading AI semiconductor stock, has been showing a shaky performance. Nvidia closed down 2.84% after reports of internal conflict with OpenAI. In after-hours trading, the stock was down an additional 0.68%. Nvidia is scheduled to report its earnings on the 25th of this month. Other major semiconductor-related companies such as Qualcomm (on the 4th) and Microchip Technology (on the 5th) are also set to release their results.

This content was produced with the assistance of AI translation services.