Observed Signal · Oct 26, 2026 · Earnings Report · Source: CNBC Investing · Impact: 2/5 · Sentiment: Positive
AMD Stands Out as AI Trade Fractures
As the AI trade shows signs of cracking, with recent selloffs in CoreWeave and IREN and growing concerns about AI infrastructure spending, CNBC's Options Action contributor Michael Khouw identifies Advanced Micro Devices (AMD) as a standout investment opportunity. Despite AMD's 8.1% drop following Meta's financing plans and a supply warning from Lam Research, Khouw's quantitative screen highlights AMD as the only major chipmaker meeting all criteria for outperformance. These criteria include price above the 200-day moving average, revenue and EPS growth exceeding S&P 500 benchmarks, rating upgrades, PEG below 3, and strong ROE/ROIC. Consensus estimates for Q3 2026 project EPS of $1.94 on revenue of $13.06 billion, representing year-over-year growth of 62% and 41% respectively. CEO Lisa Su recently announced plans to substantially increase supply in 2027 to meet surging AI demand. The article also discusses an options strategy—a call spread risk reversal—to manage the high implied volatility around earnings.
The article focuses on AMD as a potential investment due to strong earnings expectations, but it does not directly impact the AdTech/MarTech industry. The AI trade concerns are relevant to tech infrastructure but not central to advertising technology.
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Key Takeaways & Evidence Grounding
- AMD's stock dropped 8.1% due to Meta's financing plans and a supply warning from Lam Research.
- Consensus expects AMD Q3 2026 EPS of $1.94 on revenue of $13.06 billion.
- AMD's year-over-year growth is projected at 62% for EPS and 41% for revenue.
- CEO Lisa Su said AMD would substantially increase supply in 2027 due to surging AI orders.
- CoreWeave fell 15.5% on Oct. 14 as yields on its 2032 notes touched 15%.
Connected Companies & Entities
4 Entities mapped“AMD is the main focus of the article, highlighted as a standout investment due to strong financial metrics and growth potential.”
“CoreWeave fell 15.5% on Oct. 14 as yields on its 2032 notes touched 15%, illustrating cracks in the AI trade.”
“IREN is down more than 20% this year, another example of weakness in the AI infrastructure sector.”
“Meta's financing plans contributed to AMD's stock drop, signaling concerns about AI spending pace.”
Related Market Signals & Shifts
Recent verified developments and strategic activity across this market segment.
AMD Briefly Joins $1 Trillion Club; Cramer Says Run Isn't Over
Advanced Micro Devices (AMD) briefly surpassed $1 trillion in market value last week after shares rallied nearly 13%, extending the chipmaker's turnaround under CEO Lisa Su. CNBC's Jim Cramer said on 'Mad Money' that AMD's run is not over, citing the rise of agentic AI as a growth driver for high-end CPUs. AMD shares have gained almost 30% in September, fueled partly by Meta's launch of its Muse AI agent platform. Under Su, AMD transformed from a $2.5 billion company (2014) to a near-trillion-dollar powerhouse. AMD has also secured major GPU commitments from Meta and OpenAI, competing with Nvidia in AI chips. Cramer acknowledged vulnerability to pullbacks but sees long-term opportunity intact.
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.
AMD Q1 2026 Beats Estimates; Stock Jumps 16%
Advanced Micro Devices reported stronger-than-expected first-quarter 2026 results driven by rapid data center demand for AI workloads. AMD posted adjusted EPS of $1.37 and revenue of $10.25 billion, beating LSEG consensus estimates. Data center revenue rose 57% year-over-year to $5.8 billion. The company forecast about $11.2 billion in revenue for Q2 2026, above Street expectations. AMD said its data center business is now the primary growth driver and expects server growth to accelerate as it scales supply. Management reiterated ambition to reach tens of billions in data center AI revenue next year and to exceed long-term growth targets. The stock rallied about 16% after the results, and AMD highlighted upcoming shipments of its Helios rack-scale AI system and partnerships with OpenAI and Meta for large-scale deployments.
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