Advanced Micro Devices Inc. shares fell sharply before the opening bell on Wednesday after the chipmaker issued a third-quarter revenue forecast that beat analysts' consensus but did not satisfy investors who had been expecting even larger proof that a surge in AI-related spending will accelerate growth.
The shares were last down 7.4% at $480.28, a move that would wipe roughly $61.1 billion from the company’s market value.
AMD predicted third-quarter revenue of about $13 billion, plus or minus $300 million, a range that was above the $12.52 billion estimate compiled by LSEG but below the loftier investor hopes that had been built into the stock.
Robust data-center results and long-term targets
The Santa Clara, California-based company reported data-center revenue of $6.72 billion, which more than doubled and topped expectations. Chief Executive Lisa Su reiterated an ambitious multi-year outlook, saying the company expects data-center revenue to more than double by 2027 and projecting total revenue growth above its earlier target of more than 35%.
Investors have driven AMD’s share price more than double this year on the view that the company could become the leading alternative to Nvidia in AI chips, raising the bar for quarterly results.
Analysts and market context
"We suspect expectations had moved higher following Intel’s results a couple of weeks ago, and the buyside already has a fairly bullish outlook," said Stacy Rasgon, analyst at Bernstein.
Analysts at TD Cowen described AMD’s results and forecast as "objectively good" but said the stock faced a "very high bar" after recent AI-related customer announcements and the sharp rally in the shares.
Competition in the chip sector is intensifying, with AMD trying to challenge Nvidia’s dominance while Intel is aiming to regain technology leadership after posting strong results of its own.
Recent commercial moves
Last month, AMD signed deals with Anthropic and Core Scientific as part of efforts to expand its AI infrastructure presence.
What remains unresolved
While AMD’s guidance was above consensus and data-center revenue beat expectations, investor reaction shows there is still demand for clearer, near-term evidence that the multibillion-dollar AI spending wave will convert into faster revenue acceleration and justify current market valuations.