AMD Shares Drop Despite Strong Earnings as AI Spending Concerns Loom
Advanced Micro Devices (AMD) saw its shares tumble over 6% in after-hours trading despite reporting better-than-expected Q4 earnings. The semiconductor giant posted $10.27 billion in revenue (versus $9.67 billion estimates) and $1.53 adjusted EPS (versus $1.32 expected), yet investors focused on its conservative Q1 2026 outlook of $9.8 billion (±$300M) amid surging AI infrastructure costs.
The company demonstrated robust fundamentals with 34% annual revenue growth, driven by data center and gaming segments. Gross margins expanded to 54% GAAP (57% non-GAAP), while operating income more than doubled year-over-year. This divergence between strong performance and market reaction highlights growing Wall Street sensitivity to AI capex burdens across the tech sector.
