Shares of Advanced Micro Devices (AMD) and Alphabet (Google) took a significant hit in after-hours trading following disappointing earnings reports for the fourth quarter of 2024. Both companies, which are key players in the tech industry, faced investor concerns that led to declines of nearly 10% in their stock prices.
AMD's Earnings Report: A Mixed Bag
On February 4, 2025, AMD reported a fourth-quarter revenue of $7.66 billion, which was a 24% increase from the previous year and above analyst expectations. However, the company's earnings were less rosy. AMD's net income dropped to $482 million, or 29 cents per share, down from $667 million or 41 cents per share a year earlier. Despite this decline, AMD's adjusted earnings of $1.09 per share did beat forecasts.A major highlight was AMD's data center revenue, which rose by an impressive 69% to $3.86 billion. This growth was driven by demand for its artificial intelligence chips.
However, it fell short of the expected $4.12 billion, raising concerns about the company's ability to compete effectively against rivals like Nvidia. Following the announcement, AMD shares plummeted about 5% in after-hours trading and have lost over a quarter of their value in the past year.
Alphabet's Performance: Strong Yet Underwhelming
Meanwhile, Alphabet also reported its earnings on the same day. The company achieved a total revenue of $96.47 billion, marking a 12% year-over-year increase, but this was slightly below analyst expectations of $96.56 billion. Alphabet's earnings per share (EPS) were strong at $2.15, surpassing last year's figure of $1.64.Despite solid growth in areas like Google Cloud, which saw revenues rise by 30% to nearly $12 billion, concerns lingered about missed targets in both cloud and search revenues. These shortfalls contributed to a decline in investor sentiment, leading to a drop in Alphabet's stock price as well.
Market Reactions
The reactions from investors were swift and severe for both companies. AMD shares fell from around $119.50 to approximately $109, reflecting a nearly 10% drop2. This decline is part of a broader trend where investors are increasingly wary about the future growth prospects of tech companies heavily invested in AI technologies.Analysts suggest that while both companies have shown strong performance historically, the competition is heating up, particularly with emerging players like AI startup DeepSeek posing challenges to established firms like AMD and Alphabet.
As these companies navigate their futures, investors will be closely watching their strategies in the rapidly evolving AI landscape.In summary, while both AMD and Alphabet reported growth in their latest earnings, the failure to meet certain expectations has left investors feeling jittery, resulting in notable drops in their stock prices.
With inputs from agencies
Image Source: Multiple agencies
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