Advanced Micro Devices (NASDAQ: AMD) delivered a rollercoaster performance on Wednesday, with shares surging as much as 4.9% at the market open before quickly paring gains and slipping below a 1% increase by midday.
The volatile session came on the heels of AMD’s better-than-expected first-quarter earnings report, which initially fueled optimism but was soon tempered by ongoing concerns over export restrictions and the broader outlook for AI chip demand.
Strong Earnings Beat and Upbeat Guidance
AMD’s first-quarter results handily surpassed Wall Street expectations. The company posted adjusted earnings per share of $0.96 on revenue of $7.44 billion, outpacing consensus estimates of $0.94 EPS and $7.12 billion in revenue.
Year-over-year, AMD’s revenue jumped 36%, and its data center segment stood out with a 57% surge to $3.7 billion, underscoring robust demand for AI and cloud computing chips.
CEO Lisa Su highlighted the company’s momentum, noting that AMD achieved accelerated year-over-year growth for the fourth consecutive quarter, driven by its expanding portfolio and strong execution across core businesses. The client segment also impressed, with PC chip sales soaring 68% year-over-year, while gaming revenue declined due to weaker console chip sales.
Export Controls and AI Uncertainty Weigh on Sentiment
Despite the strong headline numbers, investor enthusiasm faded as the company addressed the impact of new U.S. export restrictions on AI chips destined for China.
AMD disclosed it would incur about $800 million in inventory-related charges and estimated a $700 million revenue hit in the current quarter, with total export-related losses potentially reaching $1.5 billion by year-end.
While AMD projected second-quarter revenue between $7.1 billion and $7.7 billion-above Wall Street’s $7.25 billion estimate-analysts remained divided. Bank of America upgraded AMD to “Buy” on the strength of its results and guidance, but others, such as Jefferies, lowered price targets, citing lingering uncertainty in the AI chip market and the regulatory environment.
Technical Levels and Analyst Outlook
AMD shares opened at $100.75, hit a high of $103.42, but retreated to $98.52 by the close, reflecting a modest 0.1% decline for the day. The stock remains volatile, with key technical support around $93 and resistance near $116.
Analysts’ price targets vary widely, with the consensus at $123.50 and some projecting as high as $134, signaling both optimism and caution as AMD navigates competitive and regulatory headwinds.