Advanced Micro Devices (NASDAQ:AMD) shares fell as much as 8% in Wednesday trading after the chipmaker’s first-quarter revenue outlook failed to match the lofty expectations set by the AI-driven rally of late 2025.
While the Santa Clara, California-based company reported record fourth-quarter results—posting revenue of $10.27 billion and adjusted earnings of $1.53 per share, both beating Wall Street consensus—investors focused on the sequential slowdown.
AMD projects first-quarter 2026 revenue of approximately $9.8 billion, a decline from the holiday quarter that sparked fresh concerns over the company’s ability to gain meaningful ground against dominant market leader Nvidia.
The softer guidance is partly attributed to a sharp sequential drop in AI chip sales to China due to tightening export restrictions.
AMD recorded $390 million in Instinct MI308 sales to the region in the fourth quarter but expects that figure to plummet to just $100 million in the current period.
Additionally, the company is navigating a "significant double-digit" decline in its gaming console business as the current generation of PlayStation and Xbox hardware enters its later years.
However, despite the morning selloff, AMD remains one of the top performers in the semiconductor sector, with shares up 13.1% year-to-date prior to today’s correction.