AMD and Super Micro shares drop on weak data center results amid fading AI optimism

Shares of Advanced Micro Devices (AMD) and Super Micro Computer plunged in premarket trading on Wednesday after both companies reported disappointing results in their data center divisions, casting doubt on their AI-driven growth strategies. The weak performance sparked investor concerns about the sustainability of their recent momentum in the artificial intelligence sector. AMD, a key rival to Intel and NVIDIA in the AI chip market, saw its data center revenue fall short of expectations. While the company continues to gain traction with its AI accelerators, particularly in the server and cloud computing space, the latest earnings revealed slower-than-anticipated adoption of its latest products. Analysts noted that demand from major cloud providers and enterprise clients did not meet forecasts, contributing to the sell-off. Super Micro Computer, a major supplier of server infrastructure for data centers and AI workloads, also delivered a disappointing update. The company reported lower-than-expected revenue and margins in its data center segment, citing inventory adjustments and weaker demand from certain customers. This comes at a time when investors were expecting strong performance as AI infrastructure spending accelerates. The declines follow a broader market trend of skepticism toward AI-related stocks that have seen sharp gains in recent months. While both companies have benefited from the AI boom, recent results suggest that the rollout of AI systems is not translating into consistent revenue growth as quickly as some had hoped. Investors are now reevaluating the long-term viability of AI-driven expansion plans, especially as supply chain constraints, pricing pressures, and slowing adoption in key markets begin to weigh on performance. The sell-off highlights the risks associated with high expectations in a rapidly evolving sector where execution is just as critical as innovation.