ETFs to Buy as AMD Shares Sink Post Poor Q1 View Amid Q4 Earnings Beat

Shares of Advanced Micro Devices AMD slumped 17% on the bourses yesterday despite surpassing analysts’ top- and bottom-line expectations. This pullback was most likely triggered by the chipmaker’s first-quarter sales forecast, which fell short of some analysts’ expectations.

For investors, this share price slump may offer an opportune moment to invest in AMD shares, considering the company’s solid long-term growth potential, particularly in connection with the artificial intelligence (AI)-led technology boom. Against the backdrop of hyperscalers expanding infrastructure to meet rising demand for cloud services and AI, alongside enterprises modernizing their data centers, AMD is engaged in active discussions with customers on at-scale, multiyear deployments starting later this year with its Helios and MI450 platforms. This follows AMD’s multi-generation partnership with OpenAI to deploy 6 gigawatts of Instinct GPUs.

However, direct investment in AMD stock carries company-specific risks, including unforeseen challenges such as sudden shifts in global semiconductor export policies or major supply-chain disruptions related to its fabrication and design processes. These operational hurdles could trigger sudden and sharp declines in AMD’s share price.

Therefore, for investors looking to capitalize on this recent dip without being fully exposed to the unique single-stock volatility and company-specific challenges that could severely impact AMD’s share price at any point of time, a more prudent strategy could be to invest in Exchange-Traded Funds (ETFs) with significant exposure to this chipmaker. This approach allows investors to capture the potential upside of AMD and other industry leaders while mitigating company-specific risks arising from sector-specific challenges or geopolitical factors.

But before diving straight into these ETFs, let us check AMD’s overall performance in the fourth quarter, in terms of other metrics.

A Brief Analysis of AMD’s Q4 Results

AMD’s fourth-quarter earnings beat the Zacks Consensus Estimate by 15.9%. Revenues topped the mark by 6.2%. On a year-over-year basis, the company registered double-digit growth on both counts. 

The company witnessed record server CPU sales to both cloud and enterprise customers in the reported quarter. 

In terms of product demand, increased deployments from North American customers boosted hyperscaler demand within AMD’s cloud business, whereas a meaningful shift in EPYC adoption bolstered demand for its EPYC CPUs within the enterprise business. 

EPYC-powered public cloud offerings grew significantly in the fourth quarter, with AWS, Google, and others launching more than 230 new AMD instances. Similar momentum was seen in the enterprise segment, as the number of large businesses deploying EPYC on-premises more than doubled in 2025, and AMD exited the year with record server sell-through.

It also delivered record Instinct GPU revenues in the fourth quarter, led by the ramp of MI 350 Series shipments. 

AMD expects to generate revenues worth $9.8 billion (+/-$300 million) in the first quarter of 2026. The mid-point of the guided range represents year-over-year growth of approximately 32%, backed by strong growth expected in AMD’s Data Center and Client & Gaming segments along with modest growth in its Embedded segment. The Zacks Consensus Estimate for AMD’s first-quarter revenues is pegged at $9.3 billion, which is lower than the company guidance. 

Management believes that EPYC has become the processor of choice for modern data centers, and that strengthening server CPU demand will help AMD maintain leadership across both cloud and enterprise solutions as it transitions to its next-generation Venice CPU.

AMD remains on track to launch its MI500 series AI accelerator in 2027 and expects MI500 to deliver another major leap in AI performance to power the next wave of large-scale multimodal models.

Based on the strength of its EPYC roadmap, AMD believes it is well positioned to grow Data Center segment revenues by more than 60% annually over the next three to five years and scale its AI business to tens of billions of dollars in annual revenues by 2027.

AMD-Heavy ETFs to Buy

iShares Semiconductor ETF SOXX

This fund, with net assets worth $19.89 billion, offers exposure to 30 U.S. companies that design, manufacture and distribute semiconductors. Of these, AMD carries the second spot, holding 7.61% of the fund. Micron Technology MU and Nvidia NVDA hold the first and third spots in this fund, with 8.93% and 6.96% weightage, respectively. 

SOXX has surged 49.8% over the past year. This fund charges 34 basis points (bps) as fees. Its volume is good at an average of 6.18 million shares a day. This fund sports a Zacks ETF Rank #1 (Strong Buy). 

Invesco Semiconductors ETF PSI

This fund, with a market value worth $1.18 billion, offers exposure to 31 semiconductor companies. Of these, AMD carries the fifth spot, with 4.35% of the fund. PSI’s top three holdings include: MU (7.24%), Lam Research LRCX (5.91%) and Intel Corp. INTC (5.32%).

PSI has gained 47.8% over the past year. This fund charges 56 bps as fees.  Its volume is at an average of 102,608 shares a day.  This fund sports a Zacks ETF Rank #1.

Invesco PHLX Semiconductor ETF SOXQ

This fund, with a market value worth $948.9 million, provides exposure to the 31 largest U.S.-listed securities of companies engaged in the semiconductor business. Of these, AMD carries the second spot, holding 7.82% of the fund. NVDA and Broadcom AVGO hold the first and third spots in this fund, with 10.74% and 6.99% weightage, respectively. 

SOXQ has soared 49.6% over the past year. This fund charges 19 bps as fees. Its volume is at an average of 775,294 shares a day. This fund sports a Zacks ETF Rank #1. 

Invesco AI and Next Gen Software ETF IGPT

This fund, with a market value worth $681 million, offers exposure to 100 companies that manufacture technologies or products that contribute to future software development through direct revenues. Of these, AMD carries the second spot, holding 8.10% of the fund.  MU and Alphabet GOOGL hold the first and third spots in this fund, with 11.27% and 8.05% weightage, respectively. 

IGPT has rallied 29.2% over the past year. This fund charges 56 bps as fees.  Its volume is at an average of 66,311 shares a day. This fund holds a Zacks ETF Rank #2 (Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research