AMD Leads Selective Chip Rally Ahead of Nvidia Q2 FY2027 Earnings

Key Takeaways

• AMD advanced 4.9% and Nvidia rose 2.2% on August 25, while Intel gained only about 0.2% and Broadcom declined roughly 0.6%.
• Nvidia will report fiscal Q2 2027 results after the US market closes on August 26. The company previously guided to revenue of $91 billion, plus or minus 2%.
• Elevated expectations mean Nvidia’s forward guidance, data-centre growth, product execution and gross margin could matter more than a modest earnings beat.

US semiconductor shares recovered selectively on Tuesday as investors positioned for Nvidia’s fiscal second-quarter results, a major test of the artificial-intelligence infrastructure cycle. AMD delivered the strongest move among the large chipmakers, while Nvidia also advanced. Intel finished only marginally higher and Broadcom declined, complicating any description of the session as a uniform sector rally.

The Nasdaq Composite rose 0.7% and the S&P 500 added about 0.3% on August 25. Falling oil prices and lower Treasury yields supported growth stocks, suggesting the semiconductor gains reflected both company-specific developments and a more favourable macroeconomic backdrop.

Nvidia’s earnings could now influence whether the rebound continues or gives way to renewed volatility across AI-related stocks.

AMD Stock Jumps After Raymond James Upgrade

AMD shares climbed 4.9% to $479.18 after Raymond James upgraded the stock to Strong Buy from Outperform.

Analyst Simon Leopold also raised his AMD price target to $641 from $565, citing the company’s exposure to increasing demand for server central processing units used alongside AI accelerators and in agent-based workloads.

Leopold estimated that the server CPU market could expand at a compound annual growth rate of 44%, reaching $201 billion by 2030. The projection is an analyst forecast rather than official company guidance, but it highlights an increasingly important component of AI infrastructure spending.

Graphics processors perform the most computationally intensive model operations, while CPUs coordinate accelerators and manage retrieval, database, security and application tasks surrounding each model request. Growth in AI workloads could therefore support demand for both categories of chips.

The Raymond James upgrade gave AMD a company-specific catalyst beyond the broader technology rebound. The firm did not issue a similar upgrade to Intel, maintaining a Market Perform rating while recognising that the company could also benefit from rising server CPU demand.

Intel Stock Reaction Remains Modest After Pelosi Filing

Intel closed approximately 0.2% higher at $87.48, considerably below the roughly 3% advance described in the original source.

The stock attracted attention after a Periodic Transaction Report filed with the US House of Representatives disclosed spouse-owned Intel share and option purchases.

According to the filing, 10,000 Intel shares were purchased within a statutory value range of $500,001 to $1 million. It also disclosed the purchase of 50 call-option contracts with a $50 strike price and an expiry date of June 17, 2027. The options were valued between $250,001 and $500,000.

Both transactions occurred on July 24, although the report was digitally signed on August 21.

The timing is important because the filing documents an earlier transaction rather than an Intel purchase made during Tuesday’s market rally. Congressional disclosures also report broad value ranges rather than precise execution prices or total investment costs.

The filing may have increased retail attention toward Intel, but there is insufficient evidence to identify it as the main cause of the stock’s closing movement. The transaction also provides no direct information about Intel’s operating performance or earnings outlook.

Nvidia Earnings Become a Test of AI Infrastructure Spending

Nvidia shares gained 2.2% to close at $213.05 ahead of the company’s fiscal Q2 2027 report, scheduled for 2 p.m. Pacific time on August 26.

The company enters the announcement with demanding comparisons after reporting record fiscal first-quarter revenue of $81.6 billion, representing an increase of 85% from a year earlier.

Data-centre revenue reached $75.2 billion, rising 92% year over year and accounting for most of Nvidia’s total sales. The figures reinforced the company’s central role in supplying accelerators, networking equipment and related systems for AI data centres.

For fiscal Q2, Nvidia projected revenue of $91 billion, plus or minus 2%. Management also forecast a non-GAAP gross margin of 75%, plus or minus 50 basis points.

The company’s outlook assumed no data-centre compute revenue from China, making any management update on export restrictions, product approvals or Chinese market access particularly relevant.

Published consensus estimates vary by provider and calculation date. Forecasts released immediately before the announcement generally place revenue near $92 billion and adjusted earnings between approximately $2.08 and $2.10 per share, although some investment banks expect higher revenue.

A result near the lower consensus estimate would still represent approximately twice the revenue Nvidia reported in the comparable quarter a year earlier. However, the company’s scale and history of exceeding forecasts mean a small headline beat may not be sufficient to drive a sustained positive market reaction.

Prediction-Market Odds Show Confidence but Require Context

A Polymarket contract assigned an implied probability of approximately 96% that Nvidia would report non-GAAP earnings above $2.08 per share.

That figure should not be interpreted as a 96% probability that Nvidia will exceed every revenue, earnings and guidance forecast. The contract has a specific adjusted-EPS threshold and does not directly measure the probability of a revenue beat or stronger-than-expected forward guidance.

Trading volume in the contract was also approximately $27,900. Its relatively limited depth reduces its usefulness as a broad measure of institutional positioning.

Options markets reflect more balanced uncertainty. Pricing cited before the report implied that Nvidia shares could move roughly 6% in either direction following the announcement.

The difference between these indicators is significant. Traders may consider a narrow adjusted-earnings beat highly likely while remaining considerably less certain about revenue guidance, gross margin and the resulting share-price reaction.

Nvidia shares have declined following each of the company’s previous four earnings announcements despite continued revenue growth. That pattern illustrates how positioning and expectations can outweigh headline results when strong performance is already reflected in a company’s valuation.

Nvidia Guidance and Margins Could Determine the Market Reaction

Nvidia’s fiscal third-quarter revenue outlook will probably receive more attention than the reported Q2 numbers.

Guidance comfortably above prevailing forecasts could reinforce expectations that capital spending by large cloud companies and demand from AI developers remain strong. A cautious forecast could instead raise questions about deployment schedules, infrastructure constraints or a possible pause after customers’ rapid data-centre expansion.

Investors will also examine the progress of Nvidia’s Blackwell and Rubin product ramps. New chip cycles can accelerate revenue growth but may initially pressure gross margin while manufacturing yields, system configurations and supply chains improve.

Management’s ability to keep non-GAAP gross margin near its 75% target will therefore provide an important indication of pricing power and operational execution.

China remains another source of uncertainty because Nvidia excluded Chinese data-centre compute sales from its Q2 guidance. Competition from AMD and customer-designed accelerators represents a longer-term risk, while increasing memory, networking and energy costs could affect the economics of AI data-centre construction.

The mixed performance of semiconductor shares on Tuesday reinforces the need to separate the broader AI theme from company-specific outcomes.

Strong Nvidia results could support companies supplying advanced memory, networking equipment, semiconductor manufacturing and optical components. However, they would not eliminate substantial differences in competitive position, valuation or execution across individual chipmakers.

Conversely, disappointing guidance could pressure the wider AI trade even if Nvidia reports another quarter of record revenue.