AMD posts better than anticipated Q4 earnings and Q1 outlook, but stock falls

Core Insights - AMD reported Q4 earnings that exceeded expectations, with EPS of $1.53 and revenue of $10.3 billion, surpassing Wall Street's estimates of $1.32 EPS and $9.6 billion revenue [1] - Despite the positive earnings report, AMD's stock price declined following the announcement [1] Financial Performance - Q1 revenue guidance is projected between $9.5 billion and $10.1 billion, which is better than the Street's estimate of $9.4 billion, although some forecasts anticipated over $10 billion [2] - Data center revenue for the quarter reached $5.4 billion, exceeding expectations of $4.97 billion [3] - Client business revenue was reported at $3.1 billion, surpassing the anticipated $2.9 billion, while gaming revenue was $843 million, slightly below the expected $855 million [4] Market Context - AMD is facing challenges from a global memory shortage, which may lead to increased prices for PC makers and potential demand destruction in its PC and gaming segments [6] - The company has seen significant stock price increases over the past year, with AMD up 112% and Nvidia up 54% [3] Product Developments - AMD showcased new products at CES 2026, including the Helios rack-scale server, which is positioned as a competitor to Nvidia's offerings [7] - The upcoming MI500 series of GPUs is claimed to provide up to a 1,000x increase in AI performance compared to the older MI300X chips, indicating a strong focus on the AI data center market [8] - CEO Lisa Su anticipates the AI data center market could be worth around $1 trillion by 2030, highlighting the strategic importance of these developments for AMD [8]