AMD Q4 beats estimates, sees strong AI-driven data center growth

AMD reported quarterly earnings that exceeded expectations, with revenue of US$10.3 billion and earnings per share of US$1.53 for the quarter ending December.

Net income rose to US$1.5 billion from US$482 million a year earlier, while overall revenue climbed 34% year-on-year.

The company forecast first-quarter revenue of US$9.8 billion, plus or minus US$300 million, above analysts’ estimates of US$9.4 billion.

Despite the strong results and outlook, AMD’s stock dropped as much as 8% in after-hours trading.

Data center sales increased 39% to US$5.4 billion, driven by AI-related chips and processors.

CEO Lisa Su said server CPU demand remains strong as cloud and AI infrastructure expands.

AMD also reported US$390 million in China sales of its Instinct MI308 chips in the fourth quarter.

The company expects about US$100 million in China revenue this quarter.

🔗 Source: CNBC

🧠 Food for thought

Implications, context, and why it matters.

After-hours stock drop ties to future risks more than quarterly results

Investors sold the stock after earnings, which may come from worries about upcoming product schedules rather than the quarter that just ended.
Rumors keep circulating about delays to AMD’s next-generation MI450 AI accelerator, with one report citing Fubon Securities (a Taiwan-based brokerage) estimating the MI450 series will only be available starting in 4Q26 with limited volume and that its contribution will come in 2027 1.
AMD’s US$390 million in Q4 China sales needs extra context when weighing how repeatable that revenue may be.
That figure came from the Instinct MI308, a specially downgraded chip for China that new U.S. restrictions announced in April 2025 later barred from export, which led to about US$800 million in inventory and related charges in Q2 2025 2.
One report says shipments later resumed if AMD paid a 15% revenue share to the U.S. government, while AMD said its outlook at the time excluded MI308 China revenue since license applications were still under review 3, 2.

AMD moves beyond selling chips to selling full AI rack-scale systems

Data center growth suggests AMD wants to compete with Nvidia by delivering systems, not only parts.
The plan focuses on complete rack-scale AI systems called “Helios,” which AMD expects will fuel future growth 4.
To add system engineering and design capacity, AMD bought ZT Systems for US$4.9 billion, then agreed with contract manufacturer Sanmina (a company that builds hardware for other brands) to sell ZT Systems’ server manufacturing arm; Sanmina becomes the preferred manufacturer for rack-scale systems based on AMD’s Helios racks 5.
Helios centers on AMD’s next-generation MI400-series GPUs, targets 2026 availability, and supports pitches for gigawatt-scale projects with hyperscalers (the largest cloud providers) plus AI-native companies 4, 6.