What happened

Advanced Micro Devices (NASDAQ:AMD) shares dropped 11.9% last month, according to data provided by S&P Global Market Intelligence, after the company reported its fourth-quarter results at the end of January. The stock initially popped following the earnings release, but AMD's shares have been notoriously volatile over the past year, and February was no exception.

So what

AMD's revenue increased 33.3% in the fourth quarter to $1.48 billion. The semiconductor specialist's net income vastly improved from a GAAP loss of $0.06 per share in the year-ago quarter to earnings of $0.06 per share. For context, Wall Street was expecting earnings of $0.05 per share. The company also managed to increase its full-year 2017 revenue by nearly 25% year over year, to $5.33 billion.

Red line graph going down.

Image source: Getty Images.

That was enough good news for investors to push AMD's stock up about 7% the day the fourth-quarter results were released, but it immediately began tumbling over the next few days. To understand why, it's best to take a look at this chart:

AMD Chart

AMD data by YCharts.

AMD's stock has been very volatile for at least the past 12 months. The stock price drop in February likely came because enough investors started thinking that the company's shares were getting too expensive. At the time of the fourth-quarter release, AMD's shares were trading at about 30 times forward earnings and about 21 times book value.

Now what

AMD stock has continued to slide this month and is down just over 2% as of this writing. The semiconductor company has certainly proved that it can grow its business in an increasingly competitive market, but AMD's share price swings mean that investors will likely have to stomach more ups and downs in the coming quarters.

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.