AMD plummets 8% in premarket trading despite beating expectations
The chip giant has been a big beneficiary of the AI boom, with stock trading 132% up so far in 2026.
AMD's stock experienced a significant drop of 8.2% in premarket trading on Wednesday, despite reporting earnings that surpassed market expectations. The company's revenue for the second quarter surged 50% to $11.54 billion, exceeding analyst estimates of $11.28 billion. This marked a clear indication of AMD's dominant role in the AI chip market.
Data center sales, which grew by an impressive 107% on an annual basis to $6.7 billion, played a significant role in the company's growth, driven by both central processing unit and graphics processing unit sales. However, while earnings were "slightly ahead" of consensus, they were still lower than "more optimistic estimates," according to Deutsche Bank analysts.
Despite AMD's stock trading up 132% so far this year due to the AI boom and its strong GPU and CPU products, investor confidence has waned. CEO Lisa Su attributed this decline to the expanding demand for compute across all AMD's markets. The company had previously forecasted the semiconductor industry could be worth $2 trillion per year by 2028, with $1.4 trillion of that coming from AI accelerators or GPUs, a significant increase from their previous estimate of $500 billion by 2028.
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