AMD Stock Tumbles Overnight As CapEx Surge And SpaceX’s Nvidia Switch Overshadow Q2 Beat

Elon Musk said SpaceX will buy chips exclusively from Nvidia going forward, passing on rival Advanced Micro Devices.

• AMD’s CapEx spending in Q2 doubled from the corresponding quarter last year.
• AMD’s Q2 revenue climbed 50% to $11.5 billion, surpassing estimates.
• Retail sentiment for AMD shifted to ‘extremely bullish’ from ‘bullish,’ amid ‘extremely high’ message volume.

Advanced Micro Devices faced a double blow on Tuesday, as investors fretted over the company’s sharp increase in capital expenditure last quarter, while SpaceX said it would switch from AMD to Nvidia as its supplier for future AI chips.

AMD spent $808 million on capital expenditures in the second quarter, a steep increase from $282 million in the year-ago period and $389 million in the March quarter, according to Q2 results issued on Tuesday. AMD stock declined 8.6% in the overnight session.

The surge in capital spending overshadowed an otherwise strong quarter. Revenue climbed 50% to $11.5 billion, driven by more than doubling of data center chip sales, while adjusted earnings rose to $1.66 per share, topping analysts’ estimates of $11.3 billion in revenue and $1.62 per share in earnings.

Tech spending has emerged as a key focus area this earnings season, as investors assess the eye-popping investment against cash flow. Giants Alphabet, Amazon and Meta recently raised their CapEx forecasts for the year.

"We are still in the early innings of a multiyear AI adoption cycle and the opportunity ahead is enormous. We are exceptionally well positioned to capitalize on this opportunity and deliver significant growth in the coming years,” AMD CEO Lisa Su said on the company’s analyst call on Tuesday.

Elon Musk’s SpaceX Drops AMD for Nvidia

Meanwhile, SpaceX CEO Elon Musk said in the company’s analyst call that the rocket and AI company would no longer buy AMD’s chips. 

“Going forward, we have decided to build exclusively on Nvidia, because we think the Blackwell architecture is the best architecture,” Musk told analysts, explaining his strategy for investing in AI computing infrastructure. 

In May, he had said his two companies, Tesla and SpaceX, would likely continue to buy both Nvidia and AMD chips. 

AMD Stock Move

AMD shares have traded within a narrow range in the last two months after a sharp ascent in April and May. Year to date, the stock has gained 142%.

In the past year, AMD has increasingly shifted toward AI inference and agentic AI workloads, which are driving stronger demand for CPUs alongside GPUs. 

As AI customers seek more computing power and integrated systems, AMD and market leader Nvidia are expanding beyond standalone chips to offer end-to-end AI infrastructure, including processors, networking, software and server racks.

Retail View On AMD

On Stocktwits, the retail sentiment for AMD shifted to ‘extremely bullish’ from ‘bullish,’ amid ‘extremely high’ message volume.

“Despite [the] high CapEx of $808 million, AMD still generated $1.56 billion in free cash flow for the quarter. This shows that its operating business is currently strong enough to finance these investments,” a trader said.

“Conclusion: The doubling of CapEx is a sign that AMD is aggressively investing in the expansion of its capacity and infrastructure. As long as demand for data center and AI products continues, this is fundamentally a positive signal for future growth.”

Many traders said they expect the stock to bounce back on Wednesday. “Don’t let after-hours price action shake you. Shorts love using low-volume sessions to create fear and push a narrative. Watch the volume, not just the price,” a trader said.

“If there were genuine institutional selling, you’d expect heavy, sustained volume, not thin after-hours moves. So far, there’s no clear evidence of broad liquidation. AMD’s fundamentals didn’t suddenly disappear after the earnings call. Let the regular session reveal where real buyers and sellers stand.”

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