Advanced Micro Devices, Inc. (NASDAQ:AMD) delivered exactly the quarter investors ask for: record sales and a healthy beat, but the stock fell more than 8%. The reason behind it: SpaceX CEO Elon Musk said on August 4 that his company would build exclusively on NVIDIA Corporation (NASDAQ:NVDA) chips going forward:
“Going forward, we have decided to build exclusively on Nvidia, because we think the Vera Rubin architecture is the best architecture.”
Musk told investors on SpaceX’s own earnings call, the same day AMD reported.
Why a Beat-and-Raise Quarter Still Wasn’t Enough
The numbers themselves were hard to argue with. Advanced Micro Devices, Inc. (NASDAQ:AMD) posted $11.5 billion in revenue, up 50% year over year and ahead of the $11.3 billion Wall Street expected, with data center revenue doubling to $6.7 billion and now making up 58% of total sales, up from 42% a year earlier. Net income of $2.3 billion blew past the $1.7 billion forecast. CEO Lisa Su brushed off Musk’s comments the next day, telling CNBC she has tremendous respect for him, and reinforced guidance for server revenue to grow more than 80% in the second half of 2026.
NVIDIA Corporation (NASDAQ:NVDA) shares climbed 3.4% the same day Musk’s comments landed, without Nvidia reporting a single new number of its own. This shows how much weight the market puts on one customer’s public loyalty.
Can record sales growth and fresh deals with OpenAI, Meta, and Anthropic really outweigh losing one high-profile customer’s exclusive business, at least symbolically?
AMD’s Bull and Bear Case
This marks AMD’s fifth straight quarter of record processor sales, and the company just raised its own long-term forecast for the semiconductor market to $2 trillion by 2028, with $1.4 trillion of that coming from AI accelerators alone, up sharply from a prior $500 billion estimate. CEO Lisa Su has also been busy signing multiyear supply deals with OpenAI, Meta, and Anthropic, the last one covering up to 2 gigawatts of compute on Advanced Micro Devices, Inc. (NASDAQ:AMD)’s newest chips.
None of that stopped the stock from falling 7% to 8% on the day. Operating income of $2 billion came in slightly light. Shares already trade at roughly 170 times earnings after tripling over the past year, leaving very little room for disappointment.
Nvidia’s Bull and Bear Case
Musk’s public commitment to NVIDIA Corporation (NASDAQ:NVDA)’s architecture reinforces its status as the default pick for the biggest AI infrastructure buildouts. The stock rose purely on that news, no earnings required.
