New York, February 4, 2026, 16:03 EST — After-hours trading
- AMD shares fell 16% in regular U.S. trading after the company flagged a weaker outlook for the first quarter.
- The forecast hinges on a resumption of certain China AI-chip shipments, intensifying the debate around the true strength of data-center demand.
- The AI hardware sector will be closely watching Nvidia’s results on Feb. 25 as a key indicator.
Shares of Advanced Micro Devices plunged Wednesday after the company’s first-quarter forecast signaled a sequential decline and underscored the heavy reliance on China shipments for its recent AI-chip surge. The stock closed the regular session down 16.3% at $202.59.
This move is significant since AMD ranks among the few chipmakers investors consider credible rivals to Nvidia in AI computing, with the market pricing that competition on a quarterly basis.
In this environment, simply beating estimates won’t cut it. Investors are zeroing in on guidance, gross margins, and data-center trends to gauge how quickly AMD can convert AI demand into profits.
AMD reported a record $10.27 billion in revenue for the fourth quarter late Tuesday, projecting first-quarter revenue around $9.8 billion, with a $300 million margin of error. CEO Lisa Su described 2025 as “a defining year” as the company ramps up its data center AI operations. 1
The details caught plenty of eyes. AMD reported that Q4 included around $390 million in MI308 revenue from China and saw a roughly $360 million release of previously reserved MI308 inventory charges tied to U.S. export controls. It also highlighted nearly $440 million in net inventory and related charges for 2025 linked to those restrictions. CFO Jean Hu said AMD is positioned to “deliver profitable growth at scale.” 2
Bernstein analyst Stacy Rasgon noted the quarter “weren’t all that much beyond ‘inline’” once you strip out the China boost, pointing out that near-term AI figures “are not really inflecting.” AMD’s selloff was notable, especially against a surge in Super Micro Computer, which raised its revenue forecast and is a key server partner for major chipmakers. 3
Bob O’Donnell, president of TECHnalysis Research, noted that investors now expect “large blowout quarters” from AI hardware companies. Su, meanwhile, doesn’t see AMD facing “supply-limited” issues as it scales up its new flagship AI server for OpenAI and others later this year. She also called the China outlook “dynamic.” 4
AMD’s forecast zeroes in on margins alongside growth. The company aims for an adjusted gross margin near the mid-50% range this quarter. Gross margin shows revenue remaining after direct costs, while “adjusted” figures exclude specific one-time items.
Wednesday’s drop unfolded amid volatile trading in AI-related stocks. A steep decline in software shares this week, triggered by new tools from Anthropic’s Claude, has investors reconsidering profit sources as AI becomes more embedded in daily operations. 5
AMD faces risks as the story stays uneven: China licenses could change, major cloud clients are crafting more custom chips, and any hiccup in product ramps might squeeze margins before it affects revenue.
AMD submitted its annual report on Wednesday, offering investors a deeper dive into its risk factors and exposure to export controls. 6
Traders are now eyeing Nvidia’s earnings call on Feb. 25, a key event expected to recalibrate forecasts around AI chip demand, pricing, and margins. This will also redefine the benchmark AMD faces in the coming weeks. 7
