AMD Divides Wall Street After Q4 Results As Rising Cost Concerns Temper AI Optimism

According to TheFly, while some analysts flagged concerns with AMD’s higher-than-expected operating expenditure during the quarter, others were optimistic about the company’s new MI455 AI chip.

• Analysts at Bernstein raised their price target for AMD to $235 from $225, while keeping a ‘Market Perform’ rating on the stock.
• The firm stated that AMD’s Q4 results were good, but flagged the fact that the revenue included shipments of the MI308 chip to China worth $390 million.
• Bernstein flagged that AMD’s profitability during the quarter was impacted by higher-than-expected operating expenditure.

Advanced Micro Devices Inc. (AMD) shares were down nearly 10% in Wednesday’s pre-market trade after the company’s fourth-quarter (Q4) results and guidance for the first-quarter (Q1) left Wall Street divided.

According to TheFly, while some analysts flagged concerns with AMD’s higher-than-expected operating expenditure during the quarter, others were optimistic about the company’s new MI455 AI chip.

Divided Wall Street

Analysts at Bernstein raised their price target for AMD to $235 from $225, while keeping a ‘Market Perform’ rating on the stock. The firm stated that AMD’s Q4 results were good, but flagged the fact that the revenue included shipments of the MI308 chip to China worth $390 million.

This was also pointed out by Susquehanna’s Chris Rolland in a CNBC interview. “They announced they shipped Chinese revenue in the quarter that was unexpected. This was not in street numbers, so when you account for that, the beat was far less substantial than we would’ve thought,” Rolland said.

Bernstein flagged that AMD’s profitability during the quarter was impacted by higher-than-expected operating expenditure.

Analysts at BofA remained optimistic about AMD, hiking their price target to $280 from $260, while keeping a ‘Buy’ rating. The firm expects AMD’s server CPU business to continue growing at a strong double-digit rate in 2026. BofA stated in its note that it continues to like AMD as “a credible alternative merchant AI GPU supplier” to Nvidia Corp. (NVDA).

Morgan Stanley lowered its price target for AMD to $255 from $260, while maintaining its ‘Equal Weight’ rating on the stock. The firm stated that while AMD “said all of the right things” about the MI455 AI chip, the company’s rack scale “remains something of a show-me story for the stock to move higher.”

Mizuho cut its price target for AMD to $275 from $285 and kept its ‘Outperform’ rating on the stock. The firm stated that its price target cut was to reflect the higher spending. 

AMD’s Q1 Guidance And Q4 Beat

AMD guided for revenue of about $9.8 billion in Q1, plus or minus $300 million, representing a sequential decline of about 5%. According to Fiscal.ai data, the analyst estimates range between $9.37 billion and $10.23 billion.

AMD reported earnings per share (EPS) of $1.53 during Q4 on revenue of $10.3 billion, beating Wall Street estimates of an EPS of $1.32 on revenue of $9.67 billion, according to Stocktwits data.

“We are entering a multiyear demand super cycle for high-performance and AI computing that is creating significant growth opportunities across each of our businesses,” AMD CEO Lisa Su said.

How Stocktwits Users Reacted

Retail sentiment on Stocktwits around AMD was in the ‘extremely bullish’ territory, with message volumes at ‘extremely high’ levels. The AMD stock was the second most trending ticker on the platform at the time of writing.

One bullish user stated that it’s time to buy the AMD stock again.

However, one user pointed out that AMD’s inclusion of China revenue was not expected by analysts.

AMD stock is up 13% year-to-date and 112% over the past 12 months.

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