Key Insights

• AMD stock has pulled back from its 2026 high as semiconductor shares lose momentum.
• Nvidia's Aug. 26 earnings could influence AMD by providing another read on AI infrastructure spending.
• AMD's daily chart shows a possible bullish flag, but the price must hold key support before the $550 target comes into play.

AMD stock has retreated from its 2026 peak as investors reassess valuations across the semiconductor sector. Shares recently traded near $469, down from a year-to-date high of around $584, leaving the stock roughly 20% below that peak. The pullback comes despite strong second-quarter results from Advanced Micro Devices (AMD). Attention now turns to Nvidia's Aug. 26 earnings, which could influence sentiment toward AMD and other AI-linked chipmakers.

AMD Stock to React to Nvidia Earnings

Advanced Micro Devices stock has pulled back sharply over the past few weeks as investors reacted to ongoing volatility in the equities market. A closer look shows that many semiconductor companies have retreated over the same period.

The next important catalyst will be Nvidia's earnings, scheduled for release next week. The results matter for AMD for two main reasons. First, they will provide more hints on whether the semiconductor industry is doing well. Nvidia is the dominant supplier of the AI accelerators used inside large-scale AI data centers, so its quarterly numbers and guidance have become a de facto read on how much cloud providers and other large operators are spending on AI infrastructure. Analysts expect the upcoming numbers to show that revenue jumped 96% in the second quarter to more than $92 billion. Strong earnings would be a good sign for AMD, a company that has gained market share in the industry.

Second, the results will provide more color on Nvidia's Vera CPUs, which aim to challenge the dominance of AMD and Intel. Vera is an Arm-based server CPU designed to pair with Nvidia's GPUs in rack-scale systems, so any traction it gains would reach into the server-CPU market where AMD's EPYC processors have driven the company's share gains in recent years. That business may ultimately have an impact on AMD's operations over the long term.

AMD's Business Is Thriving

Nvidia's results will arrive a few weeks after AMD published strong second-quarter financial results that demonstrated its business was firing on all cylinders. The growth was driven mostly by the data center business, which has continued to gain market share this year. That segment houses AMD's Instinct AI accelerators and EPYC server processors — the product lines most directly tied to the AI infrastructure buildout.

The report showed that AMD's revenue jumped 50% in the second quarter to more than $11.56 billion, up from $10.2 billion in the previous quarter. Gross margin climbed to 54% from 40% previously.

Most of AMD's revenue came from the data center business, which generated more than $6.7 billion, while its client and gaming segment brought in $3.8 billion. The smaller embedded segment jumped 19% to $977 million.

Analysts following the company expect the business to keep growing this year. Third-quarter revenue is estimated at $13 billion, up 40% year over year. In total, annual revenue is expected to surge 46% this year to $50.8 billion, followed by $87 billion next year.

AMD has a long track record of beating estimates, and recent earnings from its top customers — including Microsoft, Meta Platforms, and Apple — showed that they were not slowing down their spending. That spending is the ultimate source of demand for the chips AMD sells, and it is what underpins the multi-year revenue estimates cited above.

The challenge, however, is that AMD trades at a significant premium compared with Nvidia, which is growing at a faster pace. AMD has a forward price-to-earnings ratio of 62, compared with Nvidia's 64. Its forward EV-to-EBITDA multiple has moved to 56, also above Nvidia's 22. Forward measures like these value a stock against projected future earnings rather than past results. As a result, the company will likely need to execute properly to justify its valuation.

AMD Stock Must Hold Support Before Targeting $550

The $550 target remains conditional rather than the most likely guaranteed outcome. A bullish flag is a continuation pattern in which a steep advance is followed by a tight, downward-drifting consolidation, and it is only considered valid while the price holds the support zone beneath it. AMD first needs to stabilize above the current support region and break descending resistance. A move above $500 would provide stronger evidence that buyers have regained momentum, and a sustained breakout could then open a path toward $550 and eventually the previous high.

The downside scenario also remains important after the recent pullback. A break below the 100-day EMA — a widely watched medium-term trend reference that averages the past 100 trading days of prices — would weaken the bullish-flag thesis and suggest that the correction is extending.

For now, AMD sits between strong fundamental growth and elevated market expectations. Nvidia's Aug. 26 earnings could provide the next sector-wide catalyst, but AMD still needs a confirmed technical breakout before the $550 target becomes stronger. Beyond that print, the checkpoints to monitor are whether customer AI spending plans remain intact and whether AMD delivers on the roughly $13 billion third-quarter revenue estimate.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Equity markets can experience sharp price movements.

Source: The Market Periodical