challengers in the AI processor space, the company’s guidance for the current quarter fell short of some bullish expectations, signalling that its progress in artificial intelligence has not fully matched the market’s optimism.

In its statement on Tuesday, AMD said it expects first-quarter revenue to be around USD 9.8 billion, plus or minus USD 300 million. According to data, analysts were looking for an average of USD 9.39 billion, with some estimates exceeding USD 10 billion. Following the release, AMD’s share price slid steadily in after-hours trading, ending down about 8%.

In this highly profitable market, AMD is still racing to catch up with Nvidia and is counting on a new, more powerful generation of designs due in the second half of this year to give it a competitive edge.

Like Nvidia, AMD is dealing with U.S. export restrictions on advanced chips destined for China, the world’s largest semiconductor market. Although the Donald Trump administration has recently taken steps to ease some controls, obtaining the necessary approvals from the Commerce Department still takes time.

In the last quarter, AMD generated USD 390 million in revenue by shipping older MI308 chips to Chinese customers and expects such sales to be around USD 100 million in the current quarter.

More broadly, AMD is counting on large-scale deals with OpenAI and Oracle, as well as overall demand for AI hardware, to bring in tens of billions of dollars in new revenue over time. Analysts and investors have been pressing management for more precise timelines on when that revenue will meaningfully materialise.

Recent agreements with OpenAI, Oracle and the U.S. Department of Energy highlight growing market interest in AMD’s MI-series AI accelerators. These products compete head-on with Nvidia’s chips in data centers, where they are used to build and run AI services.

Market Commentary:

AMD is also one of the largest suppliers of graphics chips and central processing units (CPUs) for personal computers and servers. Its main rival in this segment, Intel, issued a disappointing forecast last month, saying it could not secure enough supply to meet strong demand. Wall Street has interpreted this as a sign that AMD is steadily gaining market share.