AMD, a rival to Wall Street’s AI darling NVIDIA, posted better-than-expected earnings but saw its stock plunge over 8% in after-hours trading.
On Tuesday, AMD shares tumbled 8.40% to $109.46 in after-hours New York Stock Exchange trading. This sharp decline followed a 4.58% surge during regular trading hours, driven by anticipation of strong earnings.
After the closing bell, AMD reported quarterly revenue of $7.66 billion and earnings per share of $1.09, both exceeding FactSet’s projections of $7.53 billion and $1.08, respectively.
Looking ahead, AMD forecasts revenue of $7.1 billion for the upcoming quarter, slightly above FactSet’s estimate of $7 billion.
Despite these positive results, AMD’s stock price fell more than 8% after-hours trading.
Analysts suggest this counterintuitive reaction may be due to the relatively modest margin by which AMD beat market expectations, leaving investors wanting more from the chip giant.