ETFs to Buy as AMD Shares Sink Post Poor Q1 View Amid Q4 Earnings Beat

Core Insights - Advanced Micro Devices (AMD) shares fell 17% despite exceeding analysts' earnings and revenue expectations, primarily due to a weaker-than-expected sales forecast for the first quarter [1][10] Financial Performance - AMD's fourth-quarter earnings surpassed the Zacks Consensus Estimate by 15.9%, with revenues exceeding expectations by 6.2%, showing double-digit year-over-year growth [6] - The company achieved record server CPU sales to cloud and enterprise customers, driven by increased deployments from North American clients and a significant shift in EPYC adoption [6][7] - EPYC-powered public cloud offerings saw substantial growth, with over 230 new AMD instances launched by major players like AWS and Google [8] Future Outlook - AMD projects first-quarter revenues of approximately $9.8 billion, indicating a year-over-year growth of around 32%, although this is below the Zacks Consensus Estimate of $9.3 billion [9][10] - Management believes that the EPYC processor will continue to be the preferred choice for modern data centers, supporting leadership in cloud and enterprise solutions [11] - AMD anticipates growing Data Center segment revenues by over 60% annually over the next three to five years and aims to scale its AI business to tens of billions in annual revenues by 2027 [12] Investment Opportunities - The recent share price decline may present a buying opportunity for investors, particularly given AMD's long-term growth potential linked to the AI technology boom [2] - For those seeking to mitigate company-specific risks, investing in Exchange-Traded Funds (ETFs) with significant AMD exposure is recommended [4] ETFs with AMD Exposure - iShares Semiconductor ETF (SOXX): Holds 7.61% of AMD, with net assets of $19.89 billion and a 49.8% increase over the past year [13][14] - Invesco Semiconductors ETF (PSI): AMD represents 4.35% of this $1.18 billion fund, which has gained 47.8% in the past year [15] - Invesco PHLX Semiconductor ETF (SOXQ): AMD accounts for 7.82% of this $948.9 million fund, which has risen 49.6% over the past year [16][17] - Invesco AI and Next Gen Software ETF (IGPT): AMD holds 8.10% of this $681 million fund, which has increased by 29.2% in the past year [18][19]