| Chipmaker Advanced Micro Devices (AMD) kicked off earnings season with what should've been a solid win. | The company reported $10.27 billion in Q4 revenue, beating estimates of $9.67 billion, and even hinted at the expected first-quarter revenue of $9.8 billion (give or take $300 million), ahead of Wall Street's $9.38 billion forecast. 🥂 | Sounds amazing, right? Well… apparently, investors wanted more. | And when they didn't get what they wanted, they sold — hard. 📉 | Shares plunged more than 17% on Wednesday, one of the stock's sharpest single-day drops in years. The reason wasn't weak demand or collapsing margins. It was something far more dangerous in today's market — I call it… "expectations about expectations." 🧐 | Which is a shame, to be honest, as until now, AMD has been riding the AI wave beautifully. 🤖 | The stock is up more than 100% over the past year, fueled by soaring demand for data-center chips and its growing role as Nvidia's most legit rival in AI accelerators. | Alas, with that kind of base, investors weren't just hoping for a beat — they were pricing in a spectacular surprise. 📈 |  | As Susquehanna analyst Chris Rolland put it, expectations were already "pretty sky high," but also pointed out that AMD shipped China-related revenue during the quarter that wasn't fully accounted for by Wall Street. So, technically, once adjusted, the upside suddenly looked… less exciting. 😐 | Not bad, to be fair, just not… fireworks. | But speaking long-term, the fundamentals remain strong. 💪 | Demand for AMD's data-center chips continues to climb, and management hinted at multi-gigawatt AI contracts in the works. The company's October partnership with OpenAI could be transformative, with plans to deploy 6 gigawatts of AMD's Instinct GPUs over the next few years, starting at the end of this one. 🤝 | But markets aren't patient, especially right now, with some experts saying that they're rewarding acceleration, not sustainability. |
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