CEO defends outlook after sharp market reaction
Advanced Micro Devices shares fell sharply on Wednesday, dropping 17% in their worst session since May 2017, even as Chief Executive Lisa Su defended the company’s forward outlook and pointed to accelerating demand tied to artificial intelligence. The selloff followed fourth-quarter earnings that exceeded expectations but failed to deliver the stronger forecast some investors had anticipated.
Speaking in an interview on CNBC, Su said demand for AI-related computing continues to grow at a pace that has exceeded internal expectations. She emphasized that spending on AI infrastructure remains robust and that customer needs for computing power are rising faster than overall capacity.
Data center momentum builds into the new year
According to Su, AMD’s data center business gained momentum from the fourth quarter into the first quarter, with demand for central processing units surging as enterprises expand their AI workloads. She described CPU demand as exceptionally strong, driven by businesses rapidly scaling compute resources to support AI-driven applications.
AMD reported quarterly results on Tuesday that beat Wall Street estimates, reinforcing the view that underlying demand remains healthy. However, the upbeat earnings performance was overshadowed by guidance that fell short of the more aggressive expectations priced into the stock.
Outlook misses heightened investor expectations
The company said it expects first-quarter revenue of $9.8 billion, plus or minus $300 million, compared with market expectations of roughly $9.38 billion. While the forecast technically exceeded consensus, some analysts had been looking for a more pronounced upside given the scale of AI investment across the technology sector.
Investor expectations were elevated after a strong fourth quarter that included several large partnerships, such as deals with OpenAI and Oracle. Those agreements, combined with broader industry investment in data centers, had fueled hopes that AMD would signal a faster acceleration in revenue growth.
Second-half inflection tied to new AI systems
Su said AMD expects a meaningful inflection in the second half of the year as the company begins shipping its next-generation integrated server-scale AI system, known as Helios. She added that development and launch plans for the platform remain on track.
The company views Helios as a key step in expanding its footprint in large-scale AI deployments, particularly as demand for advanced computing infrastructure continues to surge alongside enterprise and cloud-based AI adoption.
