- Advanced Micro Devices faced a double blow as Q2 capital expenditure more than doubled sequentially, while SpaceX CEO Elon Musk announced the company will exclusively use NVIDIA chips moving forward.
- AMD reported strong Q2 revenue of $11.5 billion, a 50% increase year-over-year, but the spending surge overshadowed the earnings beat, sending shares down 8.6% in after-hours trading.
- Retail sentiment on Stocktwits swung to ‘extremely bullish’ from ‘bullish’ amid ‘extremely high’ message volume, with traders citing the company’s ability to generate free cash flow despite heavy investment.
Advanced Micro Devices faced a double blow on Tuesday after reporting a sharp increase in capital expenditure and losing a major customer. The chipmaker spent $808 million on capital expenditures in the second quarter, up from $389 million in the prior quarter and $282 million in the year-ago period.
SpaceX CEO Elon Musk announced during the company’s analyst call that it would no longer purchase AMD chips. “Going forward, we have decided to build exclusively on Nvidia, because we think the Blackwell architecture is the best architecture,” Musk said.
Despite the spending concerns, AMD reported strong quarterly results with revenue climbing 50% to $11.5 billion, driven by more than doubling of data center chip sales. Adjusted earnings rose to $1.66 per share, topping analysts’ estimates of $1.62 per share.
AMD CEO Lisa Su expressed confidence in the company’s position during the analyst call. “We are still in the early innings of a multiyear AI adoption cycle and the opportunity ahead is enormous,” Su said.
On Stocktwits, retail sentiment for AMD shifted to ‘extremely bullish’ from ‘bullish,’ amid ‘extremely high’ message volume. One trader noted the company generated $1.56 billion in free cash flow despite the high capital expenditure, calling the investment a positive signal for future growth.
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