AMD Shares Slide Despite Earnings Beat as AI Hype Fails to Offset Profit-Taking

Advanced Micro Devices Inc. delivered a fourth-quarter earnings beat that failed to satisfy Wall Street, with shares dropping as much as 8% in extended trading despite surpassing analyst estimates. The chipmaker reported adjusted earnings of $1.53 per share on $10.3 billion revenue, outperforming consensus projections of $1.32 and $9.67 billion respectively.

Data center growth emerged as the standout performer, surging 39% annually to $5.4 billion. CEO Lisa Su highlighted robust demand for both traditional server CPUs and AI accelerators, though China sales face headwinds from U.S. export controls—projected to decline from $390 million in Q4 to just $100 million this quarter.

The market reaction suggests inflated expectations surrounding AI spending, with investors using the earnings event to take profits after AMD's 13% year-to-date rally. First-quarter revenue guidance of $9.8 billion, while above analyst estimates, failed to meet whisper numbers anticipating more aggressive projections.