Stacy Rasgon on Semiconductor Tariffs, AMD's AI Business, and Sector Impact

Upcoming Semiconductor Tariffs

• 🇺🇸 The US is expected to announce new tariffs on semiconductors and chips within the next week or two, separate from existing tariffs.
• 🎯 These tariffs are intended to incentivize semiconductor manufacturing within the United States.
• 💡 The structure of these tariffs is uncertain, but they may target component-level tariffs within finished devices, not just raw semiconductors.

Impact and Investor Sentiment

• 📉 While investors have largely dismissed previous tariff announcements, these may have a more significant impact.
• 📈 The semiconductor sector has seen strong price increases, with semi prices up 50% over the last 5 years, suggesting potential for disruption.
• 🤔 The effectiveness and policy implications of tariffs are debated, especially when applied in a "blind" manner.

AMD's Q2 Results and AI Business

• 📉 AMD's AI revenues were down due to China export controls, impacting their ability to sell AI chips there.
• 📊 While AMD reported a slight revenue beat and raise, the growth was primarily in gaming, with other segments like client and data center (excluding AI) in line.
• 💰 Despite revenue growth, AMD's spending is increasing significantly, limiting earnings leverage and leading to a guided-down EPS.
• 🚀 The stock's performance has been strong recently, but the Q2 results were not sufficient to meet the elevated expectations, leading to a stock price decline.