AMD Shares Fall 8% After Musk Picks Nvidia

Advanced Micro Devices (AMD) shares dropped more than 8% in pre‑market trading on Wednesday following an announcement by Elon Musk that SpaceX will no longer purchase processors from AMD and will instead build exclusively on Nvidia’s Blackwell artificial‑intelligence server architecture, which Musk described as “the best architecture.”

Financial Results (Quarter Ended 27 June 2026)

AMD posted second‑quarter revenue of $11.54 billion, slightly above Wall Street expectations of $11.25 billion. Data‑center revenue reached an all‑time high of $6.7 billion, representing 58% of total sales, up from 42% a year earlier. The client and gaming segment generated $3.84 billion, a 6.1% year‑over‑year increase. Adjusted earnings per share were $1.66, beating the consensus estimate of $1.60.

Outlook and Guidance

For the upcoming quarter, AMD guided revenue of approximately $13 billion, with a variance of plus or minus $300 million. This guidance implies roughly 41% year‑on‑year growth and a 13% sequential increase, exceeding analyst expectations of $12.51 billion. The company also projected server‑related revenue to grow more than 70% in the next fiscal year.

Strategic Updates

CEO Lisa Su highlighted accelerating demand for EPYC processors and scaling Instinct GPU deployments, noting that the AI boom is expanding compute demand across all markets. She referenced recent large‑scale infrastructure commitments announced at a July investor event: up to 2 GW with Anthropic, 6 GW with Meta Platforms, and 2.5 GW with Core Scientific. AMD also raised its forecast for the central‑processing‑unit (CPU) market to exceed $200 billion by 2030 and aims to capture more than 50% of that market.

Market Reaction

The stock decline was driven primarily by Musk’s statement, which overshadowed the otherwise strong quarterly performance and upbeat guidance. Analysts at Morgan Stanley noted that while AMD expects robust server revenue growth, they had anticipated an even stronger near‑term acceleration based on prior quarters’ enthusiasm.