Here's Why AMD Stock Is Crashing After a Great Quarter

Despite handily beating analyst estimates and bumping up its full-year guidance in the third-quarter report it delivered after the bell Tuesday, shares of Advanced Micro Devices (NASDAQ: AMD) sank about 8% at market open on Wednesday. New products, including Ryzen CPUs and Vega GPUs, drove a double-digit increase in revenue, and AMD returned to profitability. But investors sold off the stock regardless.

What's going on? Expectations were simply too high. Shares of AMD quadrupled in 2016 on the hope that new products would make the company competitive again. Those products did their job during Q3, but not to the degree required to justify the stock's frothy valuation.

Image source: AMD.

Source: Fool.com