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AMD Shares Tumble on Weak AI Chip Forecast
4 Feb
Summary
- AMD's stock dropped nearly 7% on weak quarterly sales forecast.
- Investor concerns grow about AMD's ability to challenge Nvidia.
- A China-bound AI chip sales boost aided AMD's fourth-quarter results.
Advanced Micro Devices (AMD) experienced a nearly 7% decline in premarket trading on Wednesday, February 4, 2026, due to a weaker-than-expected sales forecast. This downturn has amplified investor doubts about AMD's capacity to compete effectively with Nvidia, the dominant player in the AI chip market. The stock's retreat occurs amidst a broader selloff in global software stocks, influenced by concerns that artificial intelligence might supersede existing software solutions, following an updated chatbot release from Anthropic.
Despite the challenges, AMD projected first-quarter revenue around $9.8 billion, slightly surpassing analysts' estimates but falling short of the $10.27 billion achieved in the fourth quarter of 2025. This outlook was bolstered by $390 million in approved AI chip sales to China, a crucial factor that prevented AMD's data center segment from missing its fourth-quarter targets. Analysts noted that near-term AI performance was not significantly inflecting without this China-specific revenue.
