Advanced Micro Devices (NASDAQ:AMD) wrapped up a stellar fourth quarter, exceeding Wall Street’s earnings and revenue expectations. However, investor sentiment took a hit, sending shares down over 9% in premarket trading on Wednesday after the company signaled a slowdown in its data center business for the upcoming quarter.
During Q4, AMD capitalized on surging demand for artificial intelligence computing and widespread adoption of its EPYC processors, driving robust financial results. The company reported adjusted earnings per share of $1.09, narrowly beating analysts’ projections of $1.08. Revenue soared to a record-breaking $7.7 billion, marking a 24% year-over-year increase and outpacing the forecasted $7.54 billion.
The standout performer was AMD’s Data Center division, which saw its revenue nearly double on the back of increasing demand for its EPYC server chips. This segment played a key role in AMD’s overall 2024 success, which was marked by record-breaking full-year revenue of $25.8 billion and a non-GAAP gross margin peaking at 53%.
Despite these achievements, the outlook for Q1 2025 has investors on edge. AMD projects revenue in the range of $6.8 billion to $7.4 billion, with the midpoint slightly exceeding analyst expectations of $7.04 billion. However, concerns over a potential slowdown in data center sales appear to be overshadowing the otherwise strong financials, fueling the stock’s sharp premarket decline.
AMD’s leadership remains confident in the company’s long-term trajectory, emphasizing ongoing momentum in high-performance computing and AI acceleration. Still, with investors closely watching the competitive landscape and demand trends, the coming quarters will be critical in determining whether AMD can sustain its growth trajectory.
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