AMD Shares Tumble Despite Record Quarterly Performance
05.02.2026 - 22:36:04
A paradox unfolded in the markets on February 4th. Advanced Micro Devices (AMD) unveiled what appeared to be stellar fourth-quarter 2025 results, only to see its equity value plummet by 17% the following day. The catalyst for this severe sell-off was not the past performance, but a forward-looking statement that failed to meet the market's soaring expectations for the company's role in the artificial intelligence boom.
On February 3rd, AMD reported financial figures for Q4 2025 that handily surpassed analyst projections. Revenue surged 34% to $10.27 billion, exceeding the Wall Street consensus estimate of $9.67 billion. The company’s net income nearly tripled, reaching $1.51 billion, which translated to earnings per share of $0.92.
The adjusted metrics were even more robust. Operating income hit a record $2.85 billion, while adjusted earnings per share came in at $1.53. For the full 2025 fiscal year, AMD posted revenue of $34.64 billion, representing growth of 34%.
The Crux of Investor Disappointment: Q1 2026 Outlook and China
The market's negative reaction stemmed directly from AMD's forecast for the current quarter. Management projected Q1 2026 revenue of approximately $9.8 billion. While this figure is above the analyst consensus of $9.38 billion, it fell short of the more aggressive growth trajectory investors had priced into the stock.
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Compounding the concern was a detail within that guidance: it includes roughly $100 million in sales of AI chips to China. AMD indicated that this particular revenue stream would be limited going forward. Market expert Chris Rolland of Susquehanna told CNBC that expectations had been "ratcheted up pretty high." He also noted that unexpected China-related sales in Q4 had the effect of distorting the underlying strength of the quarterly results.
Strong Strategic Positioning Amidst the Volatility
Despite the sharp share price correction, AMD's strategic position in the AI sector remains formidable. The company confirmed significant, long-term commitments from key partners. OpenAI plans to deploy 6 gigawatts of AMD Instinct GPUs over several years, with the first gigawatt scheduled for the second half of 2026. Separately, Oracle announced its intention to utilize 50,000 AMD AI accelerators. At the recent CES 2026, AMD also introduced its Helios platform and the Instinct MI440X accelerator, targeting enterprise AI applications.
The trading activity on February 4th highlighted the intensity of the institutional response. Volume skyrocketed to 104.9 million shares, a figure 157% above the three-month average, signaling substantial selling pressure from large investors. All eyes will now be on AMD's first-quarter 2026 results to determine if the company can sustain its high growth narrative without significant contributions from the Chinese market.
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