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Surprising AMD earnings report: despite beating across the board, the stock price still fell. Clearly, at this stage, the market demands more stringent expectations for AI companies' futures. Before the Q2 earnings report concludes, market confidence is insufficient to support the current valuation! In my AMD earnings preview, I mentioned the strongest combination: Revenue beats expectations + Data center beats expectations + MI350 sales volume increase + Q3 guidance raised + Gross margin ≥56% + MI450 progress ahead of schedule, orders on hold And AMD's earnings report basically fulfilled all six points, except for the MI450-related matters which were weaker. Currently, AMD's pre-market stock price in the US also shows about an 8% drop. Looking closely at the earnings details, I believe the core reason for the stock price decline is the temporary saturation of current earnings orders + unclear MI450 guidance leading to weaker future expectations. This has caused the market to further adjust the stock price and valuation. Let's break it down: 1. AI data center: The key validation is whether AMD can continue to capture more GPU market share from Intel. The answer is yes, and faster than expected! 2. MI350 customer demand: The core product sales remain strong; demand has not weakened but further strengthened. According to earnings data, the commercial logic from MI350 to data center is basically validated. 3. MI450 future guidance: Management states MI450 will significantly ramp up in the second half of 2026 and accelerate further in 2027. OpenAI's first 1GW MI450 deployment plan starts in the second half of 2026, and Oracle plans to deploy 50,000 MI450 GPUs from Q3 2026. Management also states that the data center segment business will grow 100% in 2027. 4. AI revenue growth catching up with Nvidia: Both AMD and Nvidia are growing in AI business. AMD aims to narrow the gap and eventually surpass Nvidia in growth rate. The earnings show AMD's AI revenue growth continues to outpace Nvidia, allowing AMD to keep telling the story of "replacing Nvidia." 5. Gross margin held at 56%, basically meeting guidance, which is a passing mark. This proves AMD's revenue growth is not from price cuts to boost sales. Next, it remains to be seen if the gross margin can stay at 56% after core products switch to MI450. 6. Q3 guidance: Earnings guidance for Q3 revenue is raised by 13%, exceeding market expectations. This means Q2 is not the peak of business growth, and there is still ample room for growth ahead. Honestly, this earnings report is much better than SpaceX's report released at the same time. So why hasn't AMD escaped the pre-market stock price decline? I think the core issue is the current lack of market confidence triggering valuation adjustments. After all, the Q2 earnings are not fully finalized, and Nvidia's earnings report has not been released yet. Although AMD's current performance exceeded expectations, the slow pace of raising expectations means future guidance, especially regarding MI450's profitability and growth, has not given the market a perfect answer. This leads the market to adjust AMD's future valuation again. Trading strategy: Similarly, AMD's earnings highlight its strong fundamentals. The current stock price decline mainly comes from valuation adjustments, which is normal and reasonable. Next, we need to see if AMD's stock price will attract new buying and rebound strongly after the US market opens tonight. If the rebound is weak, it means the short-term market is unwilling to pay for this valuation, and the entire AI sector's investment confidence has not fully recovered. Then we need to wait longer. Unlike SPCX, AMD may undergo valuation adjustments along with the entire AI sector. Based on previous trends, it is not undervalued now. No rush to buy; waiting for the Q2 earnings finalization might be a better opportunity to build a position. #AMD财报超预期，增长已被透支？