AMD earnings miss on weak personnel services

What happened: Advanced Micro Devices (AMD) reported earnings, with its Personnel Services segment hit hard, leading to a revenue decline of 22.8% and an operating EBITDA drop. This resulted in AMD's stock valuation resetting below recent annual figures for the first time in three years, signaling a shift in investor sentiment. Meanwhile, AMD's CEO, Lisa Su, expressed optimism about the second half of 2026, citing a revenue ramp-up for its MI450 chip. Separately, Cognizant Technology forecasted quarterly revenue below estimates due to cautious client spending on IT services, sending its shares down 6% in premarket trading.

Market impact: The earnings miss and weak outlook from AMD, a key player in the semiconductor industry, triggered a revaluation of its stock, pushing its price-to-earnings ratio lower. This move could impact other semiconductor stocks, as investors reassess valuations in the sector. The cautious IT spending signaled by Cognizant may also affect other IT services providers, as clients scale back on spending due to macroeconomic uncertainty.

What to watch next: AMD's next earnings report, scheduled for late July, will provide further insight into the company's performance and investor sentiment. Additionally, the IT services sector will be closely watched for any signs of recovery in client spending, with Cognizant's next earnings report in August being a key catalyst. Lastly, the broader semiconductor industry's performance, particularly in the second half of 2026, will be crucial in determining AMD's stock trajectory, as investors await the ramp-up of its MI450 chip revenue.