Market Recap- 11/3/26- AMD Just Answered The AI Demand Question
Election Day turned out to be a pretty good day to own chips. After Monday pushed the Nasdaq-100 into correction territory, buyers returned to semis Tuesday and dragged the tech indexes higher. The Nasdaq rose 0.83% to 25,372, and the S&P 500 added 0.36% to 7,568.92, ending a three-day losing streak. The Dow was the odd one out, down 197 points (0.38%) to 51,786, and you can thank AAPL for that. One green day doesn’t fix much, though. The Nasdaq-100 is still roughly 10% off its October high, and breadth was weak again, with more stocks falling than rising under the surface.
AAPL fell 1.9% and lost about $94 billion in market value, even after posting record September-quarter revenue of $114.5 billion. The problem was the holiday-quarter margin forecast, which Apple says will be squeezed by rising memory chip costs. Keep that in mind, because it matters for the chip trade below. $PLTR slipped 1.65%: revenue grew 96%, but new U.S. commercial contract value grew only 11%. Among the bigger movers, $AEHR jumped 26% on record revenue and a raised forecast, while $SHOP fell almost 9% after revenue came in just under estimates.
On the macro side, the 10-year yield crept up to about 4.91%, and a couple of Fed presidents are now openly talking about rate hikes. Oil had a wild morning: it spiked on reports of a U.S. strike on Iran’s Qeshm Island, then gave it back on talk of a U.S.-Iran deal, leaving Brent around $104. Polls close tonight, and prediction markets put Democrats near 75% to take the Senate. Some on the Street think a full blue sweep could weigh on stocks tomorrow, but JPMorgan’s scenario work suggests the market reaction should stay modest whatever happens.
Now the main event. AMD reported after the bell, and it beat and raised. Revenue came in at a record $13.4 billion, up 45% from a year ago, above the top of its own guidance range and ahead of the $13.09 billion consensus. Adjusted EPS was $2.09 against $1.94 expected. Data Center revenue nearly doubled, up 97% to $8.5 billion, on Instinct GPUs and EPYC server chips. The most important number is the guide: AMD sees about $17 billion in Q4 revenue, plus or minus 3%, versus a Street estimate of roughly $16.2 billion. That’s 66% year-over-year growth and a 27% jump from the quarter it just reported. The stock was up around 7% after hours.
What that means for chips going forward: for weeks, the market has been selling AI on worries about capex fatigue and spending getting ahead of demand. AMD just guided a $17 billion quarter as its Helios rack systems ramp, and said Microsoft, Meta, and OpenAI are already running models on them. That’s a direct answer to the “is the demand real” question. The read-through reaches past AMD, too. ANET also beat after the close, with revenue up 58.5%, its fastest growth since the IPO. Put that next to Apple’s warning about memory costs, and you have three separate signals that AI infrastructure demand is still pulling hard on networking, memory, and compute. That’s constructive for MU, TSM, AVGO, and the AI hardware group as a whole, and it gives NVDA a better setup heading into its report later this month.
AMD’s report isn’t flawless. Q4 gross margin is guided to tick down to 55%, and gaming revenue fell 40%. The bigger risk tonight is the election, not AMD. If the results spook the market, a great chip print can still get sold in a risk-off open. But if semis can hold their after-hours gains through tomorrow’s session, that’s the first real sign this correction is finding a floor.
Have a great night; see you in the Discord in the morning.