AMD stock falls 9% in extended trading despite beating revenue estimates— here's why | Stock Market News
Advanced Micro Devices (AMD) shares slumped nearly 9% in after-hours trading on Tuesday, even as the chipmaker reported second-quarter results that beat Wall Street expectations, driven by strong demand for its data-centre chips powering AI applications.
The stock fell from its previous close of $518.58, though it has nearly tripled over the past year as investors bet AMD's ‘Instinct’ AI chips capture market share from rival NVIDIA.
AMD's revenue rose 50% year-on-year to $11.54 billion, beating estimates of $11.28 billion. Adjusted profit came in at $1.66 per share, above forecasts of $1.62, Reuters reported.
The company attributed the strong performance to its Data Center segment, which generated $6.7 billion in revenue, up 107% annually, driven by robust CPU and GPU sales.
For the current quarter, AMD guided revenue of about $13 billion, plus or minus $300 million, compared with LSEG's $12.52 billion estimate. Some analysts had expected guidance closer to $14 billion, according to CNBC, which helped explain the sharp after-hours decline.
AMD’s shares also came under pressure after Elon Musk said his company would no longer buy AMD’s chips, according to the Wall Street Journal. Musk told investors on 4 August that SpaceX will build its future artificial intelligence infrastructure exclusively on NVIDIA systems and plans to begin launching NVIDIA‑powered “Starmind” compute satellites in 2027. The announcement was made during the AI‑to‑rocket firm’s first earnings call as a listed entity.
In July, AMD raised its forecast for the global semiconductor industry, projecting the market could be worth $2 trillion per year by 2028. It expects $1.4 trillion of that opportunity to come from AI accelerators, or GPUs, up from a previous estimate of $500 billion, CNBC reported.
“We expect Data Center sales to accelerate in the second half of 2026, driving stronger overall revenue growth and continued earnings expansion,” AMD CFO Jean Hu said in a statement.
On an earnings call with analysts, AMD CEO Lisa Su said the company expects its data centre sales to double in 2027 and that server revenue will increase by more than 80% annually in the second half of the company’s fiscal 2026.
The forecast suggests that AMD is becoming more confident about the growth of the AI chip market. It also indicates that the company’s investments to compete with NVIDIA are beginning to show results, with strong growth in its data-centre processor business during the second quarter.
The chipmaking company has also secured major customers and infrastructure agreements in recent months.
In July, AMD signed a major deal with Anthropic, under which it agreed to sell tens of billions of dollars' worth of AI servers powered by up to 2 gigawatts of MI450 chips starting in early 2027, and to invest up to $5 billion in the IPO-bound Claude maker, subject to certain deployment milestones.
A week ago, AMD also secured access to up to 2.5 gigawatts of data-centre capacity through a deal with Core Scientific. As part of the agreement, AMD received warrants to purchase the company's stock, Reuters reported.(With wire inputs)
Eshita Gain is a digital journalist at Mint, where she joined in May 2025. She writes on corporate developments, personal finance, markets, and business trends, with a focus on delivering timely and relevant stories to a broad audience. <br><br> While her core beat lies in business and finance, she is not confined to a single niche and frequently explores stories across domains, including international relations and policy developments. <br><br> She holds a postgraduate diploma in business and financial journalism by Bloomberg from the Asian College of Journalism (ACJ), Chennai. During her time there, she received rigorous training in tracking financial data, interpreting corporate filings, and reporting on business developments. She has pursued her graduation from St. Joseph’s University, Bengaluru in a multi-disciplinary course. Her majors included Journalism, International Relations, peace and conflict studies. <br><br> Eshita has previously worked in digital marketing, which enables her to write SEO friendly copies that are clear and engaging. <br><br> Her primary interest lies in breaking down complex subjects and writing clear, accessible copies that inform readers. She aims to bridge the gap between technical financial language and everyday understanding. Outside the newsroom, Eshita enjoys reading non-fiction, and exploring new places, constantly seeking fresh perspectives and stories beyond headlines.
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