AMD plummets 8% in premarket trading despite beating expectations

AMD‘s stock plunged on Wednesday despite posting earnings that beat expectations, as investor enthusiasm for the Nvidia challenger waned.

The stock was last down 8.2% in premarket trading.

The market jitters come despite AMD revenue climbing 50% to $11.54 billion in the second quarter, ahead of analyst expectations of $11.28 billion, in a sign of the company’s central position in the market for AI chips.

Data center sales drove much of the company’s growth, up 107% on an annual basis to $6.7 billion, which the company attributed to central processing unit and graphics processing unit sales.

But while second-quarter earnings came in “slightly ahead” of consensus, they fell below “more optimistic estimates,” Deutsche Bank analysts said in a Wednesday note.

AMD has been a big beneficiary of the AI boom, with the stock trading up 132% so far this year. Confidence has been buoyed by the company’s GPU and CPU products.

“AI is driving a significant expansion in demand for compute across all of our markets,” CEO Lisa Su said in a Tuesday statement. “Our leadership portfolio and growing customer visibility position us exceptionally well to capture this expanding opportunity and deliver substantial revenue and earnings growth in the years ahead.”

Earnings failed to impress investors who’ve consistently been skittish this year of some AI stocks.

In July, AMD raised its expectations for the size of the semiconductor industry, saying it could be worth $2 trillion per year by 2028. The chipmaker sees $1.4 trillion of that coming from AI accelerators, or GPUs, up from a previous estimate of $500 billion by 2028.

— CNBC’s Kif Leswing helped contribute to this report.