AMD shares dropped 9% after the company reported its latest earnings, despite some positive signals from its business. Analysts say the decline was driven by a combination of high investor expectations and unexpected elements in the results. “First, expectations were pretty sky high,” said Chris Rolland of Susquehanna, speaking on CNBC’s “Closing Bell Overtime.” “Secondly, they announced they shipped Chinese revenue in the quarter that was unexpected. This was not in street numbers, so when you account for that, the beat was far less substantial than we would've thought.” The surprise inclusion of revenue from China—particularly from sales that were not previously forecasted—dampened investor enthusiasm. While AMD’s overall earnings and revenue came in above analysts’ estimates, the market reacted negatively because the underlying performance was less impressive once the China-related figures were factored in. Despite the stock drop, Rolland noted that demand for AMD’s data center chips remains robust. The company also provided encouraging forward-looking guidance, hinting at upcoming multi-gigawatt contracts that could significantly boost its AI hardware business. One major development came in October, when AMD announced a strategic partnership with OpenAI. Under the agreement, OpenAI could take a 10% stake in AMD as part of a long-term deployment of 6 gigawatts of AMD’s Instinct GPUs. The rollout will begin in the second half of 2026 with an initial 1-gigawatt deployment, signaling a major commitment to AMD’s AI infrastructure. Additionally, Oracle revealed plans in October to deploy 50,000 of AMD’s AI chips, starting later this year. These partnerships underscore growing confidence in AMD’s position as a key supplier of AI hardware, especially as the demand for high-performance computing accelerates across the industry. While the earnings report fell short of investor hopes in the short term, the long-term outlook for AMD’s data center business remains strong, supported by high-profile deals and continued momentum in the AI market.