Market reaction
AMD reported a 50% increase in revenue and projected that server CPU shipments would expand by 80% year-over-year in the second half of 2026, yet shares moved sharply lower in pre-market trade - down 7.77% to $478.29 from a prior close of $518.58 - after an initial jump on the earnings print. Intel registers a related slide, off 2.26% pre-market to $98.59 from $100.86. The price behavior reads as a post-earnings multiple reset rather than a reversal of the central CPU growth thesis.
The overnight reversal
Both stocks rallied on the headline results during the regular session but reversed after hours. The swings reflect a valuation re-calibration following a period of strong advance in AMD shares, not new negative information on the sector. A short table of the moves: AMD prior close $518.58 to pre-market $478.29 (-7.77%) with a one-day move of +7.00%; Intel prior close $100.86 to pre-market $98.59 (-2.26%) with a one-day move of +10.84%.
Underlying demand remains intact
AMD's quarterly figures carry structural significance. Data-center revenue reached $6.7 billion, more than doubling year-over-year and composing 58% of total sales. Management guided server CPU growth at +80% year-over-year for H2 2026 and +70% for full-year 2027. The company also provided a Q3 outlook of roughly $13 billion in revenue, about +41% year-over-year, with gross margin near 56%.
AMD cited new and expanded commercial engagements, including a partnership with Anthropic for up to 2 gigawatts of MI450 capacity and a wider deployment on Microsoft Azure Helios. These commercial arrangements contribute to the revenue mix cited in the guidance.
Supporting read-across from Intel
Intel's recent results align with the narrative of expanding compute demand: its Data Center and AI (DCAI) unit rose 59% year-over-year to $6.3 billion, registering the firm's strongest revenue growth overall in 15 years. Both Intel and AMD disclosed long-term server CPU agreements with Chinese buyers, providing a baseline of demand the market appears to have underappreciated.
Why the pullback occurred
The immediate downward pressure on AMD looks primarily like valuation gravity. AMD had advanced approximately 136% year-to-date ahead of the earnings release, leaving the stock priced for an exceptionally positive outcome. When the company delivered strong results, profit-taking and multiple contraction followed, trimming the post-release gains. Several brokerages - including Mizuho and DA Davidson - have maintained Neutral on Intel at current levels, implying limited further upside from the immediate earnings pop. By contrast, KeyBanc's bull-case valuation for AMD remains significantly higher, with a target that implies upside versus pre-market prices.
What the current trade setup suggests
Intel's modest pre-market decline toward $98.59 appears to be driven by investor reaction to AMD's after-hours weakness rather than Intel-specific negative developments. Intel's own fundamentals, including roughly 25% revenue growth and a 59% year-over-year expansion in DCAI, remain intact and support a case for continued exposure to CPU demand.
For AMD, the pre-open setback near -7.77% may offer a re-entry opportunity for investors who missed the prior run, as the company reinforced its server momentum with meaningful guidance and new commercial commitments. The broader theme of a server CPU supercycle - fueled in the analysis by compute-intensive agentic AI workloads and accelerating momentum for AMD's EPYC family - remains in evidence, and the China deal flow cited by both firms provides additional demand cushioning that many market models did not fully anticipate.
Bottom line
The near-term price action has been dominated by a correction in valuation after a significant YTD rally, rather than fresh negative signals on CPU demand. AMD's reported operational metrics and forward guidance, together with corroborating figures from Intel, point to continued strength in data-center and server CPU markets even as multiples recalibrate in the short term.
Additional note - The article presents the data and market moves as reported around the earnings event and the immediate pre-market session. It does not introduce new numerical data or updates beyond those figures provided above.