Advanced Micro Devices, Inc. (AMD) beat Wall Street’s estimates across the board Tuesday, with revenue up 50% and data center sales more than doubling. The stock still fell as much as 10% in extended trading anyway.
Sandisk Corporation (SNDK) is up more than 400% this year already, reports its own results on Wednesday under even higher pressure to deliver.
Why a Clean Beat Still Wasn’t Enough
AMD’s revenue rose to $11.54 billion, beating the $11.28 billion analysts expected, and adjusted earnings came in at $1.66 a share versus $1.62 expected. Data Center revenue, the heart of AMD’s AI story, more than doubled to $6.7 billion. However, guidance for the current quarter, about $13 billion, landed below the $14 billion some analysts had hoped for. It still topped the $12.52 billion Wall Street consensus.
This makes you wonder: is the stock drop just profit-taking after AMD nearly tripled over the past year, or does falling short of the highest guidance estimates signal real doubts about how fast Data Center growth can keep accelerating?
The Bull Case
Advanced Micro Devices, Inc.’s Data Center growth is the whole story: revenue there jumped 107% year-over-year. The company also just raised its own estimate for how big the AI chip market can get. It now projects $2 trillion a year in total semiconductor spending by 2028, with $1.4 trillion of that from AI accelerators alone, up sharply from its earlier $500 billion estimate. AMD is also starting to ship Helios, its first full-rack-scale AI system, to customers including Meta (META), OpenAI, and Oracle (ORCL). That’s a direct challenge to Nvidia's (NVDA) own bundled systems, not just its chips. CFO Jean Hu said Data Center sales should “accelerate in the second half of 2026, driving stronger overall revenue growth.”
The Bear Case
Even with the beat, the stock sank because guidance disappointed investors positioned for an even bigger number. Advanced Micro Devices, Inc. also depends heavily on Taiwan Semiconductor (TSM) for manufacturing, and the tight advanced packaging capacity there remains a real bottleneck the company doesn’t fully control. Its client and gaming business, selling chips for laptops and consoles, grew just 6% year over year, showing the AI story is carrying almost all of AMD’s growth right now.
Sandisk’s Bull and Bear Case
Sandisk Corporation reports on Wednesday after already gaining more than 400% this year. Wells Fargo (WFC) just raised its price target to $1,620 from $1,250, implying another 33% of upside even after that run. The firm noted tightening NAND memory supply and a shift toward long-term supply contracts.
The bull case rests on a real structural move in how AI servers are built: new designs now call for 96 memory chips per server, up from just 8 a year ago. Zacks’ Brian Mulberry called that twelvefold jump in demand for a “durable trade” for the next 12 to 18 months.
However, the bar Wall Street has set is extraordinary since analysts reportedly expect adjusted earnings of $34.52 a share, versus just 29 cents in the same quarter last year, an increase of more than 11,000%. Investors expect huge results because the stock rose so much, so even a small miss could crash the price.
Insider Monkey’s Hedge Fund Data
Insider Monkey’s hedge fund database shows Advanced Micro Devices, Inc. had 118 hedge fund holders as of Q1 2026, up from 103 the quarter before. Sandisk had 114, up from 75, lagging behind AMD.
Among memory and storage peers, Micron (MU) had 154 holders, up from 137.
Conclusion
AMD just proved that even a genuine beat isn’t enough when guidance falls short of the market’s highest hopes. Sandisk Corporation faces an even steeper version of that same test on Wednesday, reporting into a stock that has already priced in extraordinary growth.
While we acknowledge the risk and potential of AMD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame.
Comments
Log in or sign up to join the conversation.