NEW YORK, Feb 4, 2026, 5:03 PM EST — After-hours
Shares of Advanced Micro Devices plunged 17.3% during Wednesday’s regular session and were last quoted at $200.19 in after-hours trading, following a first-quarter forecast that suggested a decline from the previous quarter. Nvidia dropped 3.3%, while Intel edged down 1.4%.
This move is significant since AMD stands as Wall Street’s top “second source” for data-center AI chips, and expectations keep climbing. Traders view this segment as a premium-growth play; if guidance falls short of clear acceleration, the selloff tends to be swift.
The timing is tricky for the wider AI sector. Investors remain uncertain if the recent spike in AI data center investments will generate profits fast enough to meet the high expectations weighing on semiconductors and software.
AMD projects first-quarter revenue around $9.8 billion, give or take $300 million. This includes about $100 million from Instinct MI308 AI-chip sales to China. The company also expects a non-GAAP gross margin near 55%, a figure adjusted to exclude certain items. In Q4, AMD posted $10.27 billion in revenue and non-GAAP earnings of $1.53 per share, with MI308 sales to China hitting roughly $390 million. CEO Lisa Su described 2025 as “a defining year,” while CFO Jean Hu emphasized AMD’s ability to achieve “profitable growth at scale.” (Advanced Micro Devices, Inc.)
Despite the beat-and-raise report, the stock slide indicated investors are looking for more immediate evidence that AMD is actually grabbing significant share in AI accelerators. AMD has touted its growing data-center portfolio, yet the market remains impatient with anything framed as a “later in the year” play.
Bernstein analyst Stacy Rasgon noted AMD’s results were basically “inline” once you strip out the China boost, pointing out that near-term AI figures “are not really inflecting.” Reuters highlighted added pressure from custom AI chips developed by major tech companies, plus a multibillion-dollar processor supply agreement between Google and Anthropic. They also mentioned a fresh software selloff linked to a new Claude legal plug-in. (Reuters)
AMD’s drop dragged growth stocks lower. The S&P 500 fell 0.51%, and the Nasdaq dropped 1.51%, while the Dow managed a slight gain. “The market is suddenly skeptical and concerned about it,” noted Jed Ellerbroek, portfolio manager at Argent Capital. (Reuters)
The next step hinges on more than just AMD’s performance. Changes in hyperscaler spending or new U.S. export restrictions altering what chipmakers can sell to China could upend expectations once more, leaving chip stocks volatile.
Traders are now eyeing the next big macro event that might shift rate forecasts and tech stock valuations. The January U.S. jobs report, delayed, is slated for release on Feb. 11. Meanwhile, January’s CPI and real earnings figures have been moved to Feb. 13, according to Barron’s. (Barron’s)
