<\/p>\n
Advanced Micro Devices (AMD) just reported the strongest quarter in its 56-year history, and shareholders responded by selling.<\/p>\n
The chipmaker posted record revenue, more than doubled its data center sales, and raised its outlook above what Wall Street expected.\u00a0<\/p>\n
On paper, it was close to a perfect print, but the stock fell anyway. It droppedas much as 10% on Wednesday, Aug. 5.<\/p>\n
The reason had almost nothing to do with the numbers AMD released. It came from a different earnings call happening the same night. That call was SpaceX’s. <\/p>\n
Why AMD stock dropped despite a record Q2 2026 earnings beat<\/p>\n
AMD reported second-quarter revenue of $11.5 billion, up 50% from a year earlier, with adjusted earnings of $1.66 per share. Both figures beat expectations.<\/p>\n
Data center revenue more than doubled to a record $6.72 billion, a 107% year-over-year jump driven by demand for its Instinct GPUs and EPYC server processors.<\/p>\n
More AMD Coverage:<\/p>\n
Bank of America revamps AMD stock price target for 2026Goldman Sachs resets AMD stock price target for the rest of 2026Top analyst strongly resets AMD stock price target<\/p>\n
AMD guided third-quarter revenue to about $13 billion, ahead of the roughly $12.5 billion analysts modeled.<\/p>\n
That still fell short of the more aggressive numbers some investors had penciled in, which was closer to $14 billion.\u00a0<\/p>\n
When a stock climbs more than 100% into an earnings date, meeting expectations often is not enough.<\/p>\n
AMD reported record second-quarter revenue on Aug. 4, but its stock still fell after a rival chipmaker landed a high-profile customer.<\/p>\n
Sundry Photography / Getty Images<\/p>\n
How Elon Musk’s SpaceX announcement affected AMD<\/p>\n
The bigger blow landed during SpaceX’s first earnings call as a public company, held the same evening.<\/p>\n
Musk told analysts that SpaceX will build its AI infrastructure exclusively on Nvidia (NVDA), calling the Vera Rubin architecture the best available, The Motley Fool reported.\u00a0<\/p>\n
The comment carried weight because Musk had said in May that his companies would likely keep buying from both Nvidia and AMD. This was a public reversal.<\/p>\n
It also arrived at the worst possible moment for AMD’s core sales pitch.<\/p>\n
For the past year, AMD has worked to convince investors that major AI buyers view its chips as a real alternative to Nvidia.\u00a0<\/p>\n
A high-profile customer choosing Nvidia exclusively undercuts that argument in front of the whole market.<\/p>\n
Nvidia stock rose about 4% on the news, while AMD dropped up to 10%.<\/p>\n
SpaceX, the Starmind satellites, and AMD’s lost pipeline<\/p>\n
SpaceX no longer just launches rockets. It runs AI infrastructure at scale, hosting workloads for outside customers and building its own orbital compute program.<\/p>\n
Alongside the exclusivity comment, SpaceX and Nvidia announced a partnership to build the compute payload for Starmind AI1, Teslarati noted.\u00a0<\/p>\n
The Starmind AI1 is a satellite designed to run AI workloads directly in low Earth orbit.<\/p>\n
Each Starmind satellite will carry Nvidia’s Rubin GPUs and Vera CPUs. SpaceX aims to begin deployments as early as 2027.<\/p>\n
What AMD lost with the SpaceX decision:A customer scaling AI compute capacity aggressively through 2027A pipeline analysts estimate could eventually exceed $100 billion in chip demandA reference win that would have validated its MI450 chips against Nvidia<\/p>\n
None of that revenue was ever booked, so the direct financial hit is unclear. AMD did not disclose any specific dollar impact.<\/p>\n
The damage is to the growth narrative, not the current quarter.<\/p>\n
How AMD’s business is now leaning on one division<\/p>\n
The quarter also exposed a concentration issue.<\/p>\n
AMD’s strength increasingly comes from a single source. Its data center division now accounts for roughly 58% of total revenue, while its client and gaming segments show flatter growth.<\/p>\n
Related: Fresh lawsuit drops bombshell on Micron stock price<\/p>\n
That makes the company more sensitive to large data center customer decisions, which is exactly the type of decision SpaceX just made.<\/p>\n
Investors reward concentration when the biggest market is expanding. They punish it when a major buyer defects, which helps explain the speed of Aug. 5’s selloff.<\/p>\n
Why Wall Street analysts stayed bullish on AMD stock<\/p>\n
Several major firms raised their AMD price targets right after the report, according to Yahoo Finance.<\/p>\n
Analyst price targets after AMD’s Q2 reportWells Fargo: raised to $700 from $615, OverweightJefferies: raised to $650 from $640, BuyJPMorgan: raised to $550 from $385, Neutral<\/p>\n
Citi kept AMD as a top Buy idea, and KeyBanc stayed Overweight.<\/p>\n
AMD CEO Lisa Su brushed off the SpaceX decision in a CNBC interview, saying she has tremendous respect for Musk and expects the two companies to keep working together over the longer term.<\/p>\n
Su also pointed to secured multiyear deployments with Meta, Microsoft, OpenAI, and Anthropic, customers that keep AMD firmly inside the hyperscaler buildout.<\/p>\n
What AMD needs to prove before the stock recovers<\/p>\n
The company guided data center revenue to more than double in 2027 and expects overall revenue growth above its 35% target.\u00a0<\/p>\n
Analysts still see AI GPU growth running well over 100%. Turning those targets into reported results is what needs to happen next.<\/p>\n
What has to go right for AMD’s thesis to holdMI450 chips win a visible, named hyperscale customer to replace the SpaceX narrative.Data center revenue growth stays above 100% into 2027.Client and gaming stabilize so that growth is not resting entirely on one segment.<\/p>\n
For long-term investors, the record quarter shows the AI demand is real, and AMD is capturing a large share of it.\u00a0<\/p>\n
The SpaceX loss is a setback to the story, not a change to the fundamentals reported this quarter.<\/p>\n
For shorter-term traders, the risk is simpler. AMD trades at a steep valuation, and the stock has little room for error when a major customer walks away.\u00a0<\/p>\n
Wednesday, Aug. 5, showed how quickly that can trigger a sell-off.<\/p>\n
The next real test comes when Nvidia reports and when AMD has to convert its 2027 guidance into booked data center revenue.<\/p>\n
Related: Wells Fargo doubles down on AMD stock after Anthropic deal<\/p>\n
#AMD #Stock #tumbles #SpaceX<\/p>\n","protected":false},"excerpt":{"rendered":"
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