Advanced Micro Devices (AMD) shares closed 7% lower on Wednesday, even as the company reported record second-quarter revenue of $11.54 billion and a 107% surge in data-center sales. The decline highlights how elevated market expectations and external pressures, including SpaceX’s decision to exclusively use NVIDIA chips, overshadowed strong financial results.
AMD Q2 Revenue Up 50%
AMD posted revenue of $11.54 billion, up 50% from $7.69 billion a year earlier, and above the $11.28 billion analyst consensus cited by Reuters. Non-GAAP earnings reached $1.66 per share, while GAAP earnings were $1.38 per share. Data-center revenue rose 107% to $6.72 billion, accounting for 58% of quarterly sales, driven by demand for EPYC server processors and Instinct graphics processors.
The company forecast third-quarter revenue near $13 billion, with a possible $300 million swing, exceeding the $12.52 billion analyst estimate. However, analysts noted that investors had set a higher bar after recent customer deals. Gross margin improved to 54% under standard accounting, up from 40% a year earlier. Operating income hit $1.99 billion, compared with a $134 million loss, and net income jumped 163% to $2.30 billion.
SpaceX Chooses NVIDIA for AI Systems
SpaceX CEO Elon Musk announced that the company would build its AI computing systems exclusively with NVIDIA hardware, calling NVIDIA’s architecture “the best” during SpaceX’s earnings call. NVIDIA shares rose 3.4% while AMD stock fell. Musk’s statement shifted from his earlier position that his companies could source processors from AMD, NVIDIA, and others. AMD CEO Lisa Su expressed “tremendous respect” for Musk and said AMD expects to work with SpaceX over time.
AMD continues to serve large technology companies and expand its AI product line. Its Helios rack-scale systems, using MI450 accelerators, support AI training and inference, with shipments expected to rise in the second half of 2026.
Wells Fargo Raises AMD Price Target to $700
Wells Fargo analyst Aaron Rakers raised AMD’s price target from $615 to $700 while maintaining an Overweight rating, even as the market focused on valuation and near-term growth. Other analysts described the results as solid but noted a “very high bar” (TD Cowen) and that the quarter beat consensus but missed more optimistic forecasts (Deutsche Bank). Supply constraints, including TSMC’s N3 process and CoWoS packaging through 2027, remain on investors’ watchlists.
CEO Lisa Su expects data-center revenue to more than double by 2027, with server revenue growth of 80% in the second half of 2026 and over 70% year-over-year in 2027. AMD stock closed at $482.53, down 6.6%, erasing nearly $59 billion in market value.