AMD slumps on no new big customer wins, with unexpected China sales driving AI revenue beat
Sometimes stocks just go down after reporting good results. Especially if they’d been going up a lot before that.
Is Advanced Micro Devices a software stock? Because even after reporting Q4 sales and earnings beats and a Q1 sales outlook ahead of Wall Street’s expectations, shares of the No. 2 name in GPUs are sliding.
A handful of potential reasons why:
Data center sales were merely in line with expectations after accounting for sales to China. This division posted sales of $5.38 billion versus a consensus estimate of $4.97 billion. But $390 million came from sales of MI308 chips to China. After Nvidia CFO Colette Kress said H20 demand from China “never materialized” after export restrictions were lifted, investors weren’t expecting AMD’s functional equivalent of that processor to be the swing factor in delivering better-than-anticipated results from this key segment.
No big customer wins. We’re living in a world where press releases touting new major customers and partnership as well as flashy reveals on conference calls are par for the course. AMD CEO Dr. Lisa Su and CFO Jean Hu offered none of the above, with Barclays analyst Tom O’Malley flagging that “management is signaling they won’t announce all new customers.” Well, yes, but you can bet if AMD had a major win to share, they’d share it! They’d almost be obligated to. And a big cause of the plethora of price target hikes that AMD received in the wake of its megadeal with OpenAI was the presumption that this pact would beget more major buyers to choose its AI processors.
The company isn’t doing a fantastic job of expense control. Better-than-expected adjusted gross margins “was more than offset by operating expense that was ~$200MM higher than guidance (a ~200 bps OpM headwind), marking several quarters of AMD overshooting expenses,” JPMorgan analyst Harlan Sur wrote. “So, though Mar-Qtr guidance was also better than expected, the extent to which AMD is able to generate operating leverage remains in question and likely represents an overhang on the stock until this can be satisfactorily demonstrated (most likely 2H26), especially in light of risk to gross margins with the upcoming ramp of MI450/Helios later this year.”
If all this sounds narratively unsatisfying when presented against the surface-level reality of results and guidance coming in ahead of expectations, well, that’s because it is.
“We were surprised at aftermarket weakness, as all the numbers were quite good and AMD said the right stuff about the new products,” wrote Morgan Stanley analyst Joseph Moore.
Sometimes stocks just fall after reporting better-than-expected quarterly figures and outlooks. Again, ask basically any software company that’s released results recently.
But unlike those tech companies that are in free fall, AMD had been performing very well year to date heading into this report. The stock matched its longest winning streak since 2005 en route to a 13% gain, besting the VanEck Semiconductor ETF by about 2.5 percentage point and trouncing Nvidia, which is down 3.3% in 2026.
These results reaffirm that this relative performance has come despite AMD being significantly smaller and still posting substantially slower top-line growth than its GPU overlord.
