Advanced Micro Devices Stock Drops Despite Strong Earnings
Shares of Advanced Micro Devices (NASDAQ: AMD) plunged over 17% on Wednesday following the company’s earnings report for Q4. Despite reporting adjusted earnings per share of $1.53—exceeding analysts’ expectations of $1.32—and a 34% year-over-year revenue increase to nearly $10.3 billion, AMD’s stock continued to decline by nearly 4% on Thursday.
Management provided a guidance of $9.8 billion in revenue for the current quarter, which surpassed Wall Street’s consensus estimate of $9.4 billion. However, the drop in stock price may be attributed to AMD’s high valuation, trading around 90 times earnings prior to the report. Investors appear to be recalibrating their expectations, leading to concerns that even strong results weren’t sufficient to uphold the stock’s value.
