Advanced Micro Devices (NASDAQ: AMD) saw strong revenue growth and issued solid 2026 guidance, but stock fell as investors expected more. Unexpected boost in China revenue in Q4 may not repeat, but $390 million GPU sales to China helped Q4 results. Data center revenue climbed 39% to $5.4 billion, driven by record CPU sales and GPU deployments.

AMD’s client and gaming segment revenue jumped 37% to $3.9 billion, with client revenue up 34% and gaming revenue up 50%. Q4 revenue grew 34% to $10.27 billion, with gross margin at 54%. Despite high expectations, company is on track for a strong 2026, especially with GPU deliveries to OpenAI expected in the second half of the year.

Looking at valuation, AMD stock trades at a forward P/E ratio of 32 times 2026 estimates, but has a low PEG ratio of 0.2. This makes it a good buy on the price dip, given its solid outlook as AI infrastructure spending increases. The Motley Fool Stock Advisor team has identified the 10 best stocks to buy now, and AMD wasn’t one of them. Consider joining for potential monster returns.

Read more at Nasdaq: AMD Shares Slide Despite Strong Growth. Is It Time to Buy the Stock on the Dip?