AMD stock falls despite strong earnings report amid investor concerns

AMD just delivered one of its strongest quarters on record. The market’s response was to sell the stock anyway. On August 4, AMD reported Q2 2026 revenue of $11.54 billion, clearing the analyst consensus of roughly $11.3 billion. Adjusted earnings per share came in at $1.66, above the expected $1.62. Data center revenue grew 107% year-over-year to approximately $6.72 billion. Then the after-hours session opened, and AMD shed roughly 8% of its value. The stock had climbed 7% during the regular session, which means investors essentially bought the rumor, then aggressively sold the news. Three numbers that spooked the market First, capital expenditures. AMD spent $808 million in the quarter, nearly three times the analyst expectation of $298 million. That spending surge hit free cash flow hard. AMD’s free cash flow for the quarter came in at $1.56 billion, a sequential decline and well below what analysts had modeled. Second, the forward guidance. AMD projected Q3 2026 revenue of approximately $13 billion, plus or minus $300 million. Third, Elon Musk announced that SpaceX would pivot to using Nvidia chips exclusively for future AI projects. The AMD vs. Nvidia context Nvidia’s H100 and...