Wall Street futures are trading positive after the S&P 500 reached a new record high. Broad gains are supported by solid corporate earnings (with over 80% of reporting companies exceeding expectations) and optimism around diplomatic talks regarding the Strait of Hormuz.
AMD (Advanced Micro Devices) reported record Q2 revenue of $11.5 billion (up 50% year-over-year) and non-GAAP EPS of $1.66. Growth was propelled by Data Center revenue doubling year-over-year behind strong demand for its EPYC and AI processors. Despite beating on both top and bottom lines, AMD stock fell 9% in after-hours trading. Investors had bid the stock up aggressively in anticipation of a massive print, leaving the valuation vulnerable to profit-taking the moment results dropped.
The bottom line is that companies linked to the AI trade are all doing well but valuations are sky high, any disappointment is met with heavy selling. The FTSE 100 is not following the S&P 500 to new highs, it is not influenced by the AI trade. It would appear the FTSE 100 peaked at 10989. However there is still some upside in the US.