AMD’s Pre-Earnings Squeeze: Higher Graphics Card Prices Meet a Sliding Share Price

Advanced Micro Devices heads into Tuesday’s second-quarter earnings report with a curious disconnect: the company is raising prices on its graphics cards just as its stock trades nearly a fifth below its 52-week high. The juxtaposition captures the tension facing the chipmaker — operational momentum colliding with a market that has turned distinctly cautious on the AI trade.

The Radeon pricing news broke ahead of the numbers, with board partners reportedly told that graphics cards and associated memory kits will cost at least 10 percent more starting in August. The increase was originally slated for June or July but was pushed back due to soft demand and existing inventory. AMD has not officially confirmed the move. The Radeon RX 9070 XT, which launched at $599, now carries a street price of $700 to $750, driven largely by rising GDDR6 memory costs from suppliers SK Hynix, Micron, and Samsung. The move follows Nvidia’s earlier price hikes of up to 30 percent on its RTX-50 series, with the RTX 5090 now selling for $4,300 to $5,000. The memory crunch has rippled beyond graphics cards, pushing up costs for game consoles and smartphones as well.

The share price tells a different story. In German trading Friday, AMD closed at €413.10, down 1.89 percent on the day and roughly 10 percent lower over the past seven sessions. The stock now sits 19.27 percent below its 52-week high and has been trading below its 50-day moving average of €449.11 — a gap of 8.02 percent — for weeks. The options market is pricing in a move of around 10 percent in either direction in the week following the earnings release, according to Investopedia.

The pessimism stands in contrast to the company’s recent operating performance. In the first quarter, AMD reported revenue of $10.25 billion, up 37.8 percent year over year and ahead of the $9.99 billion analysts had expected. Earnings per share came in at $1.37 versus a consensus estimate of $1.30. The data center segment was again the engine, growing 57 percent to $5.8 billion — now more than half of total company revenue — while the client business rose 26 percent to $2.9 billion.

For the second quarter, the 37 analysts surveyed by FXEmpire expect EPS of $1.62 on revenue of $11.39 billion, implying sequential growth of roughly 18 percent in profit and 11 percent in revenue. Investopedia’s consensus puts the numbers slightly lower at $11.34 billion and $1.61 per share, with year-over-year revenue growth of about 48 percent. The gross margin is expected to land near 56 percent. Hitting those marks would give AMD a second consecutive quarter of revenue growth well above 30 percent.

Should investors sell immediately? Or is it worth buying AMD?

Wall Street’s price targets have diverged noticeably ahead of the report. Susquehanna raised its target from $450 to $500, maintaining a “Positive” rating, while Cantor Fitzgerald holds the highest target among covering firms at $700. The average analyst target sits at roughly $577, though the consensus rating is a more measured “Moderate Buy.” The FXEmpire-surveyed average target is lower at $529.46.

Institutional ownership stands at about 71.34 percent of outstanding shares, but the positioning picture is mixed. Axiom Investment Management, Bull Harbor Capital, and Westshore Wealth all built or added positions in the first quarter, while Raab & Moskowitz Asset Management trimmed its stake by nearly a quarter. Insider activity has also drawn attention: executives sold roughly $141.2 million worth of stock over the past three months, including CEO Lisa Su’s sale of 125,000 shares at $460.69 and Executive Vice President Mark Papermaster’s disposal of 6,000 shares. Both transactions were executed under pre-arranged Rule 10b5-1 trading plans — routine portfolio diversification that carries no signal about the company’s prospects.

The broader backdrop has done AMD no favors. Jefferies strategist Chris Wood has warned that the massive AI capital expenditures from major cloud providers could prove to be a costly misstep. Alphabet posted its first negative free cash flow since its 2004 IPO in the second quarter, while Meta’s free cash flow collapsed 91 percent to $784 million. With industry-wide capex projected at $720 billion to $745 billion for 2026, investors are increasingly questioning whether those spending plans can be justified.

Tuesday’s report therefore carries a dual burden. AMD must not only deliver the growth numbers the market has come to expect, but also demonstrate that demand for AI compute remains intact even as skepticism mounts over hyperscaler spending. If it succeeds, the recent pullback may look like a buying opportunity in hindsight. If it stumbles, the expected double-digit post-earnings move could well be to the downside.