AMD's First-Quarter Forecast Disappoints, AI Revenue Outlook Falls Short

AMD reported fourth-quarter earnings in line with expectations, but its first-quarter forecast fell short, causing its stock to drop over 6% in extended trading. The company expects about $5.4 billion in sales for the first quarter, below analyst estimates of $5.73 billion, with declines expected in major businesses including PC chips. AMD's data center business, including server CPUs and AI chips, rose 38% to $2.28 billion in sales, becoming its largest segment. The company gave a bullish update on its AI chips sales, expecting $3.5 billion in data center GPU sales this year, and reported a 62% increase in sales for its client group, but a 17% decline in its gaming segment.