AMD Leads Selective Chip Rally Ahead of Nvidia Q2 FY2027 Earnings

Date: August 25, 2026

Key Takeaways

• AMD shares increased by 4.9%, while Nvidia rose by 2.2% on August 25. In contrast, Intel saw a modest gain of 0.2%, and Broadcom experienced a decline of approximately 0.6%.
• Nvidia is set to report its fiscal Q2 2027 results after the US market closes on August 26, with a revenue guidance of $91 billion, plus or minus 2%.
• High expectations for Nvidia's earnings mean that forward guidance, data-center growth, product execution, and gross margin will be critical factors beyond just a modest earnings beat.

Market Overview

On August 25, US semiconductor shares showed selective recovery as investors prepared for Nvidia's fiscal second-quarter results, which are seen as a significant indicator of the artificial intelligence infrastructure cycle. AMD's stock exhibited the most substantial increase among major chipmakers, while Nvidia also saw gains. Intel's performance was relatively flat, and Broadcom's decline complicated the narrative of a uniform sector rally.

The Nasdaq Composite rose by 0.7%, and the S&P 500 added about 0.3%, supported by falling oil prices and lower Treasury yields, which benefitted growth stocks. This suggests that the gains in the semiconductor sector were influenced by both company-specific developments and a more favorable macroeconomic environment.

AMD Stock Performance

AMD's stock surged by 4.9% to $479.18 following an upgrade from Raymond James, which raised its rating from Outperform to Strong Buy. Analyst Simon Leopold increased the price target for AMD from $565 to $641, citing the company's strong position in the growing demand for server central processing units (CPUs) used in conjunction with AI accelerators and agent-based workloads. Leopold projected that the server CPU market could grow at a compound annual growth rate of 44%, potentially reaching $201 billion by 2030.

This upgrade provided AMD with a specific catalyst beyond the broader technology rebound, while Intel did not receive a similar upgrade, maintaining a Market Perform rating despite potential benefits from rising server CPU demand.

Intel's Modest Reaction

Intel's stock closed approximately 0.2% higher at $87.48, which was significantly lower than the anticipated 3% increase. The stock gained attention due to a Periodic Transaction Report filed with the US House of Representatives, which disclosed spouse-owned purchases of Intel shares and options. The report indicated that 10,000 Intel shares were purchased within a statutory value range of $500,001 to $1 million, along with 50 call-option contracts. However, the timing of the filing, which documented earlier transactions, did not provide direct insights into Intel's operating performance or earnings outlook.

Nvidia's Upcoming Earnings

Nvidia's shares rose by 2.2% to close at $213.05 ahead of its fiscal Q2 2027 report, scheduled for August 26. The company faces high expectations following a record fiscal first-quarter revenue of $81.6 billion, an 85% increase year-over-year. Nvidia's data-center revenue reached $75.2 billion, a 92% year-over-year increase, underscoring its pivotal role in supplying AI data centers.

For fiscal Q2, Nvidia projected revenue of $91 billion, with a non-GAAP gross margin forecast of 75%. The company's guidance excludes data-center compute revenue from China, making updates on export restrictions and market access particularly significant.

Market Sentiment and Predictions

Prediction markets show a 96% implied probability that Nvidia will report non-GAAP earnings above $2.08 per share. However, this does not guarantee that Nvidia will exceed all revenue and guidance forecasts. Options markets indicate a potential share price movement of approximately 6% in either direction following the earnings announcement.

Investors are particularly focused on Nvidia's fiscal third-quarter revenue outlook, which could significantly influence market sentiment. A strong guidance could reinforce expectations of robust capital spending by cloud companies and AI developers, while a cautious forecast might raise concerns about deployment schedules and infrastructure constraints.

Overall, the mixed performance of semiconductor shares highlights the need to differentiate between broader AI trends and individual company outcomes, as strong results from Nvidia could bolster related companies, while disappointing guidance could negatively impact the sector.