Advanced Micro Devices, Inc. (NASDAQ:AMD) shares slumped in premarket trading on Wednesday as investors reacted negatively to the chipmaker's fourth-quarter results.

Mixed Quarter: AMD 's fourth-quarter earnings and revenue came in line with expectations, while its first-quarter revenue guidance trailed estimates of some analysts. Traders, who bid up the stock ahead of the earnings week, apparently were looking to dump them.

Unfazed by the soft guidance, an analyst at KeyBanc Capital Markets maintained an Overweight rating on AMD shares and upped the price target from $195 to $270. The upward revision came as the firm rolled forward valuation to 2025.

The firm's semiconductor analyst, John Vinh, noted that the PC recovery was slightly below expectations, although it is expected to improve in 2024.

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AI Optimism Abounds: Vinh noted that the company raised its outlook for the MI300X AI accelerator to $3.5 billion, with a continuous ramp-up throughout the year, although weighted toward the second half. He also noted that Data Center revenue rose both sequentially and year-over-year, thanks to share gains in server CPU, with strong fourth-generation EPYC processor sales and faster-than-expected MI300X ramp-up.

AMD expects Data Center GPU revenue to increase sequentially off a strong number in the fourth quarter, the analyst said.

"While disappointed with non-GPU results, we're encouraged with the strong GPU revs and commentary," he added.

In premarket trading, the stock fell 6.63% to $160.65, according to Benzinga Pro data.

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