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SUMMARY
Amit Kukreja and his panel analyzed AMD and SpaceX earnings during a notably strong day for the S&P 500, focusing on AI infrastructure, semiconductor growth, and market expectations. The discussion covered financial results, guidance, and strategic developments, with particular attention to AMD's data center expansion and SpaceX's AI compute ambitions.
MAIN POINTS
- Panelists discuss the broad market rally and recent strong earnings from companies like Palantir.
- Expectations are set for AMD's earnings, with focus on AI CPU and GPU guidance and major customer announcements.
- AMD's anticipated revenue acceleration is discussed, with projections for significant growth in upcoming quarters.
- SpaceX's high short interest and Elon Musk's comments on potential short squeezes are analyzed.
- SpaceX's partnership with Nvidia for the Star Mine satellite and the company's underestimated potential are highlighted.
- Panelists debate the future of orbital data centers and the potential impact of space-based infrastructure.
- Market close recap shows strong gains across most sectors, with AMD and SpaceX among the day's top stories.
- SpaceX reports Q2 revenue of $7.8 billion, beating estimates, and posts a smaller-than-expected operating loss in AI.
- SpaceX achieves a double beat on revenue and EPS, but the stock experiences volatility after hours.
- Breakdown of SpaceX's segment revenues reveals strong performance in Starlink and AI, with significant capex investment.
- SpaceX's CFO emphasizes accelerated revenue growth and margin expansion, driven by new AI compute agreements.
- Advertising and networking stocks react to earnings, with Astera Labs and Arista showing strong after-hours gains.
- Data center and semiconductor companies continue to outperform, reflecting robust sector health.
- AMD releases earnings: revenue and EPS beat expectations, but high capex spending raises questions.
- AMD's guidance for Q3 exceeds estimates, with management expecting further acceleration in data center sales.
- Market reacts negatively to AMD and SpaceX earnings, impacting high-beta stocks after hours.
- Panelists compare AMD and Nvidia's capex strategies and discuss implications for future growth.
- AMD's long-term outlook remains positive, with Helios rack solution expected to drive future growth.
- Discussion centers on AMD's data center revenue beat and expectations for stronger performance in the coming quarters.
- Panelists debate AMD's growth relative to Nvidia and the market's willingness to pay a premium.
- Stacy from Bernstein suggests the major AI ramp for AMD is a Q4 story, with Helios expected to be a key driver.
- AMD's Q&A session addresses data center growth, Helios ramp, and gross margin dynamics for 2027.
- Elon Musk details SpaceX's Starship and Starlink ambitions, projecting massive increases in orbital payload and bandwidth.
- Musk predicts Starlink could deliver a majority of global internet traffic within a decade, driven by AI and robotics demand.
- SpaceX commits to building exclusively on Nvidia's Vera Rubin architecture for AI compute expansion.
- SpaceX operational update highlights record Starlink subscriber growth and expanding enterprise partnerships.
- SpaceX financials show strong revenue growth in space and connectivity segments, with continued R&D investment in Starship.
- Panelists react to Musk's Nvidia exclusivity announcement and its implications for the AI hardware market.
- AMD's earnings call begins, with Lisa Su outlining record revenue, profitability, and expanding data center market share.
- AMD's CFO provides detailed financials, emphasizing strong data center growth and improved gross margins.
- Panelists summarize the calls, noting AMD's bullish long-term guidance and SpaceX's ambitious revenue projections.
DETAILED ANALYSIS
The session opened against the backdrop of a robust market rally, with the S&P 500 posting one of its strongest days in recent years, up nearly 2%. This positive sentiment was attributed to a combination of strong earnings from major technology firms and broad-based sector gains. The panel, consisting of Amit Kukreja and several co-hosts, set the stage by highlighting the significance of the day's earnings reports from AMD and SpaceX, both seen as bellwethers for the semiconductor and AI infrastructure sectors.
AMD's earnings were a focal point, with anticipation centered on its performance in the AI CPU and GPU markets. The company reported revenue of $11.54 billion, surpassing the consensus estimate of $11.3 billion, and adjusted EPS of $1.66, also beating expectations. Year-over-year, revenue grew by 50%, and EPS surged by 246%.
Notably, data center revenue more than doubled, reaching $6.7 billion and now constituting 58% of AMD's total revenue, up from 42% a year earlier. This growth was driven by strong demand for EPYC processors and Instinct accelerators, with the company achieving its fifth consecutive quarter of record server CPU revenue. Cloud and enterprise sales each grew by over 70%, reflecting broad adoption across hyperscalers and traditional enterprises.
A key theme was the acceleration of AI-related growth. AMD's Helios rack-scale AI platform, combining Venice CPUs, MI450 series GPUs, Pensando networking, and ROCm software, was highlighted as a major driver for future expansion. The company announced strategic partnerships with leading AI firms such as OpenAI, Meta, and Anthropic.
Anthropic, in particular, committed to deploying up to two gigawatts of MI450 series GPUs in Helios, with the first gigawatt scheduled for deployment in the first half of 2027. Microsoft also expanded its partnership, planning to deploy Helios at scale on Azure. AMD indicated that Helios is already in production, with initial shipments set to begin later in the year and ramping through 2027.
Despite these strong fundamentals, the market reacted negatively to AMD's results, with the stock dropping as much as 10% after hours. Panelists attributed this to high expectations and the stock's significant run-up year-to-date—over 150%—which set a high bar for earnings day performance. Another point of concern was AMD's elevated capex, which came in at $88 million versus an expected $298 million, signaling aggressive investment in future capacity, particularly for the Helios platform.
The panel speculated that this capex surge was likely tied to securing long-term data center power contracts and ramping up engineering resources for new product launches.
Looking forward, AMD's guidance for Q3 was optimistic, with revenue projected at $13 billion (plus or minus $300 million), exceeding the street's estimate of $12.5 billion. Management expects data center sales to accelerate further in the second half of 2026, driven by new AI infrastructure launches and continued expansion in the server CPU market. The company also revised its long-term outlook, now expecting the data center AI accelerator market to grow at over 45% annually to $1.44 trillion by 2030, and the server CPU market to expand at more than 50% annually to $220 billion by the same year.
AMD aims to outpace these market growth rates, with data center segment revenue expected to more than double year-over-year in 2027.
The Q&A session with analysts delved into the specifics of AMD's growth trajectory. Lisa Su, AMD's CEO, reiterated that both the server CPU and data center AI businesses are poised for substantial expansion, with the Helios ramp expected to be a key inflection point starting in late 2026 and accelerating through 2027. She also addressed questions about gross margin dynamics, noting that while data center AI margins are slightly below the corporate average, the overall business mix—including a recovering embedded segment—should support continued margin improvement.
Su emphasized that AMD is working closely with memory partners to ensure adequate HBM supply, a critical component for large AI models, and that the company has flexibility to adjust memory footprints based on workload requirements.
Panelists compared AMD's strategy to Nvidia's, noting that while Nvidia's free cash flow and market share remain dominant, AMD's aggressive investments and new product launches position it well for future growth. However, the market appears to be demanding near-term results, particularly in the data center segment, and is less willing to pay a premium for future potential relative to Nvidia's established track record.
SpaceX's earnings were also closely scrutinized. The company reported Q2 revenue of $7.8 billion, beating the street's estimate of $6.8 billion. The AI segment, referred to as Neocloud, posted an operating loss of $1.26 billion, significantly less than the expected $2.39 billion.
SpaceX ended the quarter with a backlog of $47.5 billion and adjusted EBITDA of $3.5 billion. Segment breakdowns revealed strong performance in Starlink, which generated $4.92 billion in revenue, and the AI business, which contributed $2.56 billion. Capex was notably high at $18.37 billion, with the majority allocated to AI infrastructure.
Elon Musk's remarks during the SpaceX call emphasized the company's ambitions in both space and AI. He outlined plans to increase orbital payload delivery from 2,500 tons per year to potentially over a million tons annually with Starship, and eventually up to 10 million tons. Musk projected that Starlink could deliver a majority of the world's internet traffic within a decade, driven by surging demand from AI and robotics.
He also announced that SpaceX would build AI compute capacity exclusively on Nvidia's Vera Rubin architecture, citing its superiority and the company's close partnership with Nvidia. Musk suggested that SpaceX could end the year with over two gigawatts of compute, with cumulative capacity reaching up to 10 gigawatts by the end of next year.
The panel discussed the implications of SpaceX's Nvidia exclusivity, noting that this move could further solidify Nvidia's dominance in the AI hardware market. There was also skepticism about Musk's ambitious revenue targets for SpaceX, with projections of reaching a trillion dollars in annual revenue by 2030. Panelists questioned the feasibility of such growth, especially given the capital-intensive nature of SpaceX's businesses and the competitive landscape in AI and satellite internet.
Other earnings updates included strong performances from networking and data center companies such as Astera Labs and Arista, both of which reported double-digit after-hours gains. Zeta, despite beating on EPS and revenue and raising guidance, saw its stock decline, possibly due to concerns about organic growth deceleration and margin compression.
Throughout the discussion, the panel maintained a balanced perspective, acknowledging the impressive long-term opportunities for both AMD and SpaceX while recognizing the market's short-term focus on immediate results and valuation concerns. The consensus was that AMD's long-term trajectory remains intact, with the Helios rack solution and expanding AI partnerships serving as key growth drivers. For SpaceX, the company's aggressive investment in AI infrastructure and exclusive alignment with Nvidia position it as a major player in the evolving AI compute landscape, though questions remain about the sustainability and profitability of its ambitious targets.
In summary, the earnings reports from AMD and SpaceX underscored the centrality of AI infrastructure and semiconductor innovation in driving future growth. Both companies are making significant bets on the expansion of AI workloads and the corresponding demand for high-performance compute, with AMD focusing on data center acceleration and SpaceX leveraging its unique position at the intersection of space, connectivity, and AI. While the market's immediate reaction was muted by high expectations and valuation pressures, the strategic direction and financial commitments of both firms signal continued leadership in their respective domains.
LINKS
- Amit Kukreja's Twitter/X profile for market commentary and updates.
- Amit's Deep Dives Substack for in-depth stock and market analysis.
- Free news terminal for financial and market news aggregation.