Advanced Micro Devices (AMD) reported fourth-quarter earnings on Tuesday, beating revenue and profit estimates and providing a better-than-expected first-quarter outlook.
Despite the improved results, AMD shares fell on the news.
AMD reported earnings per share (EPS) of $1.53 on revenue of $10.3 billion. Wall Street expected earnings of $1.32 per share on revenue of $9.6 billion, according to Bloomberg analyst consensus estimates. The company had revenue of $7.7 billion in the same quarter last year.
AMD said first-quarter revenue will be between $9.5 billion and $10.1 billion. That’s better than Wall Street’s forecast of $9.4 billion, although some forecasts expected more than $10 billion.
Last week, Microsoft (MSFT) and Meta (META) reported their respective earnings, sparking contrasting reactions from traders: Many were hesitant about Microsoft’s increased spending and more modest growth, but praised Meta’s performance despite a sharp increase in Meta’s own AI spending.
AMD’s data center revenue for the quarter was $5.4 billion, beating expectations of $4.97 billion.
Shares of AMD and rival Nvidia (NVDA) have surged over the past 12 months, with AMD up 112% and Nvidia up 54%, even as traders have expressed concerns about an AI bubble and overspending.
On the PC side, AMD’s client business revenue reached $3.1 billion, compared with expectations of $2.9 billion. The chip designer’s gaming business generated revenue of $843 million, compared with expectations of $855 million.
AMD, like Intel ( INTC ), is dealing with a global memory shortage that could force PC makers to raise prices and lead to demand destruction that could impact AMD’s PC and gaming segments.
About a month before AMD announced its results, AMD CEO Lisa Su gave a keynote speech at CES 2026 in Las Vegas, showcasing a variety of new products.
These include the company’s upcoming Helios rack-scale server, which Su says is the best AI rack in the world, an obvious nod to Nvidia.
Helios is designed to compete head-to-head with Nvidia’s own Vera Rubin-powered NVL72 rack-scale offering. Both feature 72 GPUs and can be connected to other rack-scale systems to create a single giant AI computer.
AMD also provided more information about its upcoming MI500 series of GPUs, which the company claims will deliver up to 1,000 times better AI performance compared to older MI300X chips.
Su said she believes the AI ​​data center market will be worth about $1 trillion by 2030, giving AMD plenty of incentive to ensure it has the products it needs to lure potential customers away from Nvidia.
