NEW YORK, Feb 4, 2026, 10:42 EST
Advanced Micro Devices shares dropped nearly 7% in premarket trading Wednesday after the chipmaker projected first-quarter revenue below its record fourth-quarter figure. AMD forecast about $9.8 billion, plus or minus $300 million, factoring in a $390 million lift from China-bound Instinct MI308 AI chip sales under a U.S. license. Bernstein analyst Stacy Rasgon said some investors wanted clearer signs of sustained momentum. CEO Lisa Su expects demand for next-gen AI servers, including shipments to OpenAI, to pick up in the second half and downplayed concerns over the global memory-chip shortage. (Reuters)
The market’s response highlights just how tight the leash is on AI-linked chipmakers these days. Investors care less about past-quarter beats and more about whether the upcoming quarter appears solid, consistent, and free from reliance on any one customer or region.
AMD reported fourth-quarter revenue up 34%, hitting $10.27 billion, while net income rose to $1.51 billion. On an adjusted (non-GAAP) basis, the company posted earnings of $1.53 per share. The boost came partly from about $360 million of previously reserved MI308 inventory and related charges, along with roughly $390 million in MI308 sales to China. Its data center revenue jumped 39% to a record $5.4 billion, and client plus gaming revenue climbed 37% to $3.9 billion. Looking ahead, AMD expects around $100 million in MI308 sales to China this quarter. (Advanced Micro Devices, Inc.)
The figures highlight just how central data centers have become to the growth story, with AMD pushing EPYC server processors and Instinct graphics chips designed for AI model training and deployment. Beyond that, PC and gaming sales fluctuate seasonally, while embedded chips generally follow trends in industrial demand.
The company’s product mix is fueling debate among investors. AMD’s lineup is wide-ranging, but according to The Register, the market is brushing off anything outside AI as a distraction amid cooling PC, gaming, and embedded demand post-holidays. Su told analysts, “Our focus areas are enterprise,” signaling AMD’s shift toward higher-end PCs. He also noted AMD’s multi-year collaboration with suppliers on high-bandwidth memory (HBM), a fast memory type crucial for AI accelerators. (The Register)
Competition remains fierce. Nvidia continues to lead the data-center GPU market, while AMD faces pressure to ramp up shipments and broaden its customer base beyond a few concentrated demand areas.
There are obvious risks here. Stricter U.S. export controls might choke off sales to China once more. If the AI server surge in the second half fizzles, the stock could take a hit after its recent surge. Supply chain snarls remain a threat, despite management’s assurances they’ve accounted for them.
Costco Wholesale is now under legal scrutiny: a proposed U.S. class-action suit, brought by two California consumers, claims the retailer misled shoppers by advertising its Kirkland Signature seasoned rotisserie chicken as preservative-free. The lawsuit, seeking unspecified damages, targets all U.S. buyers of the chicken. It alleges the product contains sodium phosphate and carrageenan despite the “no preservatives” claim. Costco told USA Today it has removed the preservatives wording and said the ingredients are used to preserve “moisture, texture and consistency” during cooking, adding they’re approved by health authorities, according to the Journal de Quebec. (Journaldequebec)
