Advanced Micro Devices (AMD) shares dropped 11% after reporting fourth-quarter 2025 results on Feb. 3. Non-GAAP earnings were $1.53 per share, up 40.4% YoY, with revenues of $10.27 billion, a 34.1% YoY increase. First-quarter 2026 guidance was modest, expecting revenues of $9.8 billion.

Competition is stiff for AMD from NVIDIA, Broadcom, and Intel. AMD shares have outperformed the Computer and Technology sector but are overvalued. NVIDIA, Broadcom, and Intel are also seeing growth in AI and data-center markets.

AMD’s expanding AI portfolio includes the Helios rack-scale platform and new processors for AI PCs. CEO Lisa Su highlighted the company’s AI innovation and projected global compute capacity to grow significantly in the next five years. The data center market is expected to reach $1 trillion by 2030.

Despite the positive trends, AMD’s stock faces challenges due to competition and overvaluation. With a Zacks Rank #3 (Hold), investors may want to wait for a more favorable entry point to accumulate the stock. The company’s top-line growth is expected to improve with its expanding portfolio and growing data center AI footprint.

Read more at Nasdaq: AMD Plunges 11% Post Q4 Earnings: Buy, Sell or Hold the Stock?