AMD Sets New Q2 Records, But Investors Should Wait Until $156

AMD reported a record-breaking Q2 with strong sales and profits. Despite this, the author advises caution and suggests waiting for the stock to reach $156 before buying. The article mentions a previous article "AMD: Buy The Drop" from November 2024, where the stock was experiencing selling pressure and investors were unsure of the bottom.

Advanced Micro Devices (AMD) has reported a record-breaking Q2 with strong sales and profits, but investors remain cautious. The semiconductor giant reported adjusted earnings per share (EPS) of 48 cents, missing the 49-cent Wall Street consensus estimate [3]. However, revenue climbed 32% year-over-year to $7.69 billion, beating analyst expectations of $7.42 billion. Net income for AMD jumped to $872 million, or 54 cents per share, compared to $265 million in the prior year period.

Despite the strong performance, AMD stock tumbled over 6% in Wednesday trading after the semiconductor company reported mixed second-quarter 2025 results. The stock's decline came despite strong revenue performance. CEO Lisa Su highlighted U.S. export restrictions as a key challenge during AMD’s earnings call. "AI business revenue declined year over year as U.S. export restrictions effectively eliminated MI308 sales to China," Su explained. AMD had previously warned investors of an $800 million revenue hit in Q2 due to chip export restrictions. The company said in July it plans to resume Chinese AI chip shipments once regulatory reviews restart [3].

The company's Q3 2025 revenue guidance of $8.7 billion exceeded analyst estimates of $8.3 billion. However, this guidance excludes potential revenue from the MI308 AI chip designed for the China market. Su told CNBC that AMD has been working with the Trump administration on license requirements for Chinese chip shipments. The CEO took a "prudent" approach to guidance given regulatory uncertainty [3].

Raymond James has raised its price target on AMD to $200 from $120 while maintaining an Outperform rating following the company’s second-quarter 2025 results [2]. The stock, currently trading at $174.31 with a market capitalization of $282.63 billion, has shown remarkable momentum with a 58% surge over the past six months.

However, investors are advised to be cautious. Cathie Wood’s ARK Investment Management bought approximately $38 million in AMD shares following the earnings dip [3]. The stock has experienced a significant rally over the last three months, and some analysts suggest waiting for the stock to reach $156 before buying. This advice echoes a previous article "AMD: Buy The Drop" from November 2024, where the stock was experiencing selling pressure and investors were unsure of the bottom [1].

In conclusion, while AMD reported a record-breaking Q2 with strong sales and profits, investors remain cautious due to U.S. export restrictions and regulatory uncertainties. The stock's recent performance has been remarkable, but investors are advised to wait for the stock to reach $156 before buying.

References:
[1] https://www.theglobeandmail.com/investing/markets/stocks/AVGO-Q/pressreleases/33867441/buy-amd-stock-for-new-peaks-as-q2-earnings-approach/
[2] https://za.investing.com/news/analyst-ratings/amd-stock-price-target-raised-to-200-from-120-at-raymond-james-93CH-3822013
[3] https://moneycheck.com/advanced-micro-devices-amd-stock-cathie-wood-buys-the-earnings-dip-after-6-drop/