FRANKFURT, Feb 4, 2026, 16:38 CET
- AMD projected first-quarter revenue around $9.8 billion, signaling a drop from the previous quarter.
- The forecast factors in around $100 million in MI308 AI chip sales to China, down from roughly $390 million the previous quarter.
- Investors balanced AMD’s AI advancements with Nvidia’s profit margins amid a wider selloff hitting AI-exposed software stocks.
Advanced Micro Devices shares dropped nearly 7% in premarket Wednesday after the chipmaker’s Q1 sales outlook missed the mark for investors hungry for faster growth from its AI chips. Bernstein analyst Stacy Rasgon summed it up: “Overall results weren’t all that much beyond ‘inline’ without the China boost.” Reuters
Software stocks in Europe and the U.S. took another hit after AI startup Anthropic launched new plug-ins for its Claude “Cowork” agent, sparking worries that AI could undercut software fees. Nvidia CEO Jensen Huang dismissed the notion that AI will replace software as “illogical.” Meanwhile, J.P. Morgan analyst Toby Ogg argued the sector is “being sentenced before trial.” Reuters
The shift hits chipmakers hard. Their valuations count on sustained heavy investment in data centres to power AI model training and operation. The market, however, has swiftly punished any sign of a slowdown.
AMD projects first-quarter revenue near $9.8 billion, give or take $300 million, marking an approximate 5% drop from the previous quarter. The guidance factors in roughly $100 million in sales of its Instinct MI308 chips to China, made possible by U.S. licenses. It also expects a non-GAAP gross margin close to 55%. Non-GAAP excludes specific items; gross margin reflects the portion of sales remaining after production expenses.
AMD, headquartered in Santa Clara, California, reported a 34% jump in fourth-quarter revenue to $10.27 billion, with adjusted earnings coming in at $1.53 per share. The Data Center division posted a record $5.4 billion, marking a 39% increase year-over-year. Meanwhile, client and gaming revenue climbed 37% to $3.9 billion. CEO Lisa Su said the company is “entering 2026 with strong momentum across our business,” and CFO Jean Hu emphasized the results demonstrate AMD’s ability to “deliver profitable growth at scale.” Amd
AMD reported roughly $390 million in MI308 sales to China this quarter, along with a $360 million boost from releasing previously reserved MI308 inventory charges. Analysts flagged concerns over customer concentration and China exposure: without MI308, AMD’s data-center revenue would have hit $4.99 billion, falling short of the $5.07 billion forecast, according to a Reuters report. “Expectations for huge AI hardware quarters have distorted market outlooks,” said Bob O’Donnell, president of TECHnalysis Research. eMarketer’s Gadjo Sevilla added that growth is often “concentrated,” with China shipments capable of “influencing a quarter.” Reuters
AMD’s outlook once again spotlighted the Nvidia comparison. Nvidia projects adjusted gross margins around the mid-70% mark for fiscal 2027, while AMD aims for 55% in the current quarter, according to the Reuters report.
China continues to be a hotspot. AMD’s MI308 goes head-to-head with Nvidia’s H20 there, with U.S. restrictions forcing both companies to offer altered versions of their chips.
AMD is accelerating product launches and shifting toward selling complete AI systems—not just chips—to compete with Nvidia’s rack-scale setups that combine GPUs, CPUs, and networking. The company has a multi-year deal to provide AI chips to ChatGPT-owner OpenAI, which Reuters reports could grow into tens of billions of dollars in annual revenue. Still, investors want to see near-term results reflected in quarterly earnings.
Other AI hardware stocks showed a mixed picture. Nvidia and Broadcom slipped in premarket trading, dragging a semiconductor ETF slightly down. Meanwhile, server maker Super Micro Computer surged over 10% after raising its annual sales forecast, highlighting ongoing strength in AI server demand despite scrutiny on chip projections.
Still, several factors could work against AMD. The company calls China licences “dynamic,” and any restrictions there could pinch a revenue stream significant enough to sway a quarter. On top of that, if big-tech AI spending slows, AMD might find itself with limited options, especially if its customer base doesn’t broaden.
Some investors see the pullback as a chance to buy. In a note on Seeking Alpha, Ahan Vashi called the post-earnings slide into the low $200s a potential entry point. He put a “fair value” on the stock at $405 per share based on his model—and disclosed he holds a long position in AMD. Seekingalpha
AMD’s shares nearly doubled in 2025, tightening expectations ahead of what analysts fear could be a soft quarter. The spotlight now shifts to the company’s pledge for a second-half surge in AI server demand. The key question: will orders extend beyond just a few major deployments?
