Wells Fargo

Analysts: AMD to Outperform Despite Post‑Earnings Slide

Advanced Micro Devices reported Q2 adjusted earnings of $1.66 per share versus LSEG‑polled expectations of $1.62 and revenue of $11.54 billion versus consensus $11.28 billion. Despite the beat, AMD shares fell about 8% in premarket trading while the stock is up roughly 198% year‑to‑date as the company expands into AI‑focused server CPUs and datacenter GPUs and competes with Nvidia. Multiple Wall Street firms reiterated bullish ratings and raised price targets (Wells Fargo to $700; Bank of America $620; Goldman Sachs $640; UBS $730; Barclays $665; Citi $575), while a few firms expressed more cautious stances (Morgan Stanley equal weight $465; JPMorgan neutral $550). Analysts cited strong 2027 data‑center growth expectations (server CPU growth >70% and total DC growth well over 100%) as reasons for optimism, while noting near‑term guidance and other risks could pressure the stock.

Microsoft directs staff to default to OpenAI GPT-5.6 Sol

Microsoft has instructed engineers working on AI coding projects to default to OpenAI’s flagship model, GPT-5.6 Sol, inside GitHub Copilot as part of an internal efficiency push. The guidance came in a memo from Jay Parikh, executive vice president of Microsoft’s CoreAI engineering group, who said shifting more workloads to OpenAI models helps Microsoft get greater value from its token spending. The company continues to offer other model options and said it periodically updates internal default model settings. The move occurs alongside Microsoft’s ongoing commercial relationships and investments across the AI ecosystem, including ties to Anthropic and prior structural agreements with OpenAI.

SpaceX Earnings Weigh on Stock; Nvidia Gains

SpaceX shares fell after the company reported second-quarter results and disclosed $18.4 billion in Q2 capital expenditures, which exceeded estimates. Nvidia shares rose more than 3% after Elon Musk said Nvidia would be SpaceX’s “exclusive” chipmaking partner for its AI infrastructure buildout. Analysts highlighted the potential scale of Nvidia demand if SpaceX’s comments are realized, with estimates discussing multi-gigawatt add-ons and large potential revenue for Nvidia in 2027. AMD also fell after reporting higher capex of $808 million in Q2. The market reaction reflects investor concern about hyperscalers' AI spending while chipmakers are rewarded for increased demand expectations.