AMD Drops 6.6% Despite Beating Revenue Forecast
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- AMD shares fell 6.6% to $482.53, erasing approximately $59 billion in market value, despite forecasting Q3 revenue of about $13 billion — above the $12.52 billion analyst consensus compiled by LSEG.
- AMD's data-center revenue more than doubled to $6.72 billion, with CEO Lisa Su projecting data-center revenue to more than double again by 2027 and revenue growth above the company's 35% target.
- SpaceX CEO Elon Musk decided to build the company's computing infrastructure exclusively with Nvidia chips, adding to AMD's slide while Nvidia gained 3.3% in early trading.
- AMD had signed deals last month with Anthropic and Core Scientific to win high-profile AI customers and close the gap on Nvidia and Intel.
- TD Cowen analysts said AMD faced a "very high bar" after recent AI-related customer wins, even though its results and forecast were "objectively good."
- J.P. Morgan analysts flagged supply constraints as a risk, with projects concentrated on TSMC's N3 process and CoWoS chip-packaging technology likely to face tightness through 2027.
- Bernstein analyst Stacy Rasgon said expectations had moved higher following Intel's results two weeks prior, with the buyside already carrying a "fairly bullish outlook."
Why it matters: AMD's stock had more than doubled year-to-date on hopes it could become the leading Nvidia alternative in AI chips, so even a beat-and-raise quarter couldn't satisfy investors — the 6.6% drop shows "good" is no longer enough for the AI chip narrative. The Musk-SpaceX exclusive Nvidia deal underscores how concentrated AMD's challenge is: individual customer wins aren't enough when rivals lock in flagship commitments.
