Yahoo Finance·2026-02-10 20:10Core Insights - Artificial intelligence remains a volatile yet attractive investment sector in 2026, with recent earnings reports from Advanced Micro Devices (AMD) and Alphabet disappointing Wall Street, leading to share price declines [1][2] Group 1: AMD Performance - AMD reported record revenue of $10.3 billion for its fiscal fourth quarter ended December 27, 2025, with all divisions, including data centers and gaming, showing year-over-year sales growth [3] - The strong performance was driven by the rapidly growing AI market, as customers sought AMD's products to enhance computing power for AI applications [3] - AMD forecasts fiscal Q1 revenue of approximately $9.8 billion, reflecting a 32% increase from the previous year's $7.4 billion, although this forecast did not meet Wall Street's high expectations, resulting in a share price drop [4] Group 2: Alphabet Performance - Alphabet's Q4 sales increased by 18% year over year to $113.8 billion, marking the first time its 2025 revenue exceeded $400 billion [5] - The Google search engine significantly contributed to this growth, with Q4 sales reaching $63.1 billion, up from $54 billion in 2024 [5] - The rise in Google's search income is attributed to AI, with CEO Sundar Pichai noting increased usage driven by AI advancements [6] - Despite strong results, Alphabet's stock fell due to a 95% year-over-year increase in capital expenditures (capex) to $27.9 billion in Q4, leading to total capex costs exceeding $91 billion for 2025 [6] - Wall Street was particularly concerned about Alphabet's plans to increase capex in 2026, estimating expenditures between $175 billion and $185 billion, which the company views as necessary for advancing its AI technology [7]