How did AMD's Q4 earnings surprise investors?

AMD's Q4 earnings report disappointed investors due to a significant decline in stock price, despite strong revenue growth and improved margins.

1. **Revenue Growth and Margin Improvement**: AMD reported a record quarterly revenue of $7.7 billion, marking a 24% year-over-year increase. Gross margins improved to 51%, with non-GAAP gross margins reaching 54%, indicating better operational efficiency.

2. **Stock Price Reaction**: However, AMD's stock price fell by 26.38% during the quarter, which likely surprised and disappointed investors. The stock's performance was affected by broader market conditions and investor sentiment rather than AMD's financial results alone.

3. **Investor Sentiment**: Parnassus Investments, an investment management company, underperformed the Russell 1000 Growth Index in Q4, partly due to AMD's stock decline. This suggests that some investors may have been disappointed with AMD's stock performance relative to expectations.
4. **Market Position and Prospects**: Despite the Q4 setbacks, AMD's long-term prospects appear positive. The company is gaining traction in key markets, particularly in CPUs and AI applications, and is well-positioned to capitalize on the growing semiconductor market.

In conclusion, while AMD's Q4 financial results showcased strong growth and margin improvements, the negative surprise came from a significant drop in stock price, which may have disappointed investors. However, the company's strategic focus on AI and high-performance computing positions it well for future growth.