Advanced Micro Devices just released better-than-expected fourth-quarter results with an outlook to match, but those weren’t enough to impress investors.
The No. 2 in GPUs reported:
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Revenues of $10.27 billion (estimate: $9.65 billion, guidance for $9.3 billion to $9.9 billion).
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Adjusted earnings per share of $1.53 (estimate: $1.32).
For the current quarter, management expects:
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Revenues of $9.8 billion, plus or minus $300 million (estimate: $9.4 billion).
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An adjusted gross margin of 55% (estimate: 54.5%).
That revenue guidance for Q1 includes $100 million in sales of MI308 chips to China, as the chip designer was once again able to send some of its AI processors to buyers in the world’s second-largest economy.
In Q4, AMD generated $390 million from sales of these chips to China. Without those revenues, sales would have been a lot closer to the consensus estimate.
The knee-jerk reaction for shares is lower, off nearly 7% in after-hours trading.
“We are entering 2026 with strong momentum across our business,” Chair and CEO Dr. Lisa Su said in the press release accompanying earnings.
Earlier in earnings season, Intel — AMD’s rival in CPUs — said supply constraints were weighing on its outlook, seemingly giving AMD an opportunity to grow market share.
But of course, it’s the longevity and magnitude of the AI boom, and how big a piece of the pie AMD can grab, that will ultimately determine the success of the shares in the medium term.
During the firm’s analyst day in Q4, Su said the company could post compounded annual revenue growth of over 35% for the next three to five years, with growth above 60% in its data center business.
