Advanced Micro Devices (AMD) reported record fourth-quarter 2025 revenue of $10.3 billion. This performance represents a 34% year-over-year increase. Revenue exceeded analyst expectations. Data center sales rose 39% due to demand for EPYC processors and Instinct AI accelerators.
For the first quarter of 2026, AMD projects revenue between $9.5 billion and $10.1 billion. This guidance implies a 32% year-over-year growth rate at the midpoint.
AMD shares fell approximately 17% on February 4. The decline followed guidance that missed aggressive investor targets for AI-related growth. A wider sell-off in the technology sector also pressured the stock.
Morgan Stanley lowered its price target to $255 on February 5. The previous price target was $260. The bank maintained that the current valuation offers significant upside.