New York, Feb 4, 2026, 10:05 EST — Regular session
- AMD shares dropped early after the chipmaker warned of a sequential revenue decline this quarter.
- Sales of licensed AI chips to China boosted the outlook, but Wall Street remains on the lookout for a wider AI surge.
- Nvidia’s Feb. 25 earnings and conference call will be the next major milestone for AI hardware.
Advanced Micro Devices shares dropped roughly 13% to $211.08 in early New York trading Wednesday, following a cautious revenue forecast that rattled investors hoping for a quicker boost from the AI chip surge. Nvidia and Broadcom also slid, while Super Micro Computer saw gains.
This matters because AMD is right in the thick of a jam-packed trade: sourcing viable alternatives to Nvidia in data center chips as Big Tech pours more money into AI hardware. A cautious forecast from a potential rival can send shockwaves through the entire sector.
The move comes amid jitters in tech, as investors fret over AI tools threatening software firms. “Anthropic is now, really obviously parking its tanks on their lawn,” said IG chief markets strategist Chris Beauchamp, taking aim at entrenched software players. 1
AMD expects first-quarter revenue around $9.8 billion, plus or minus $300 million, including roughly $100 million from Instinct MI308 sales to China, the company said. That midpoint suggests about 32% growth year over year but a drop of roughly 5% from the previous quarter. The chipmaker also forecast a non-GAAP gross margin near 55%, which excludes certain items. 2
The chipmaker reported a record $10.3 billion in fourth-quarter revenue, driven by a 39% jump in its data center segment to $5.4 billion. Growth was fueled by ongoing shipments of Instinct GPUs and EPYC server processors, the company said. Revenue from MI308 sales to China hit roughly $390 million during the quarter. AMD also noted that its results were boosted by an inventory reserve release related to earlier export restrictions. 2
Bob O’Donnell, president of TECHnalysis Research, said the bar has been reset following the report. “Expectations for big blowout quarters from AI hardware companies have distorted market outlooks,” he noted. AMD CEO Lisa Su told investors, “I do not believe that we will be supply-limited” as the company scales up AI server production. 3
Bernstein analyst Stacy Rasgon was more critical, noting the quarter barely exceeded “inline” results after excluding the China boost. He also pointed out that near-term AI figures “are not really inflecting.” AMD’s shares have doubled in 2025, yet the stock still commands a much higher forward price-to-earnings ratio than Super Micro, reflecting the hefty premium baked in by positive expectations. 4
Investors are also digging into who might drive the next wave of AI demand. Reuters revealed this week that OpenAI isn’t fully satisfied with some of Nvidia’s newest chips used for inference — the stage where a trained AI model produces responses. Sources say OpenAI has been looking into alternatives like AMD, Cerebras, and Groq. 5
The downside is clear: China sales hinge on export licenses that could shift, and AMD is still battling for market share where Nvidia leads on margins, software, and supply. If major buyers pull back on AI spending or coalesce around one vendor, AMD’s growth might turn uneven—less than what the market expects.
Feb. 25 is the next key date to watch. Nvidia will report its fourth-quarter and fiscal-year results then, a closely watched event that investors rely on to assess AI chip demand and pricing trends across the industry. 6
