U.S. markets operated as usual. Core Scientific shares fell 2.7% to $20.17 just before midday.
The package tied to Advanced Micro Devices NASDAQ:AMD involves roughly 530 megawatts and represents over $14 billion in possible base revenue.
According to an SEC filing, 29% of the initial capacity is allocated to an undisclosed neocloud. AMD was also granted warrants for as many as 30 million shares.
Core Scientific shares declined by 2.7% during late-morning trade on Tuesday. The stock gave up an earlier premarket climb of about 5% after the announcement.
The shift followed as investors looked past the $14 billion headline, focusing on the specifics. These encompass an indirect tenant and the chance of a significant share overhang.
AMD agreed to direct leases totaling 377 megawatts across three locations. A neocloud, whose name has not been disclosed, leased an additional 152 megawatts, amounting to roughly 29% of the initial set. AMD also established individual credit-support deals for these leases.
Headline item
Filing detail
Preliminary investor measure
Initial allotment of about 530 MW
377 MW leased straight to AMD; 152 MW allocated to a neocloud
Approximately 29% not leased out to AMD
Warrants at market rates
Up to 30 million shares at $23.47; 6.5 million have vested
9.4% of shares as of June included; 2.0% have already vested
Up to 2.5 GW possible
AMD eligible to reserve an additional 1,925 MW until December 28, 2028
The majority of further capacity remains available as a reservation
The estimates are based on Core Scientific’s 319.6 million shares outstanding as of June 30. Exercising all warrants for cash would generate roughly $704 million in proceeds. The figures are preliminary.
The new package comes out ahead in another way. It accounts for close to 48% of Core Scientific’s reported 1.1 gigawatts of leased capacity, but delivers around 58% of the minimum value indicated in the contract.
The ratio suggests a greater contract value for each megawatt. Details such as specific pricing, power pass-through fees and timing of revenue have not been revealed.
The base lease terms are set at 15 years, with an additional three options to extend for five years each. Customer installations are expected to start in 2027.
The deal may also help lower customer concentration. At present, all of Core Scientific’s colocation income comes from CoreWeave NASDAQ:CRWV. In the second quarter, a single colocation client accounted for 83% of overall revenue.
Core Scientific has already shown a change in its operations. Revenue for the second quarter climbed 109% to $164.2 million. The colocation segment generated $136.7 million, accounting for around 83% of overall revenue.
Adjusted earnings before interest, taxes, depreciation and amortization were $41.1 million, up from $28.5 million in the same period last year.
The project continues to demand substantial capital. Capital expenditure for the quarter totaled $797.5 million, almost five times higher than revenue. Available liquidity was $1.82 billion, and long-term debt amounted to $4.30 billion.
The Hunt County and Muskogee AMD lease locations do not have the customer-financed arrangement seen with previous CoreWeave conversions. As a result, Core Scientific faces greater vulnerability to fluctuations in construction expenses and equipment price increases.
The company posted a net loss of $1.16 billion, mainly due to non-cash adjustments in warrant values related to a higher share price. Operating cash flow in the first half was positive at $230.9 million, while cash used in investing activities totaled $1.18 billion.
Mathew Hein, AMD’s chief strategist, stated the collaboration will “expand access” to critical AI infrastructure. Core Scientific’s CEO Adam Sullivan said the deal would “support AMD’s technology roadmap.” Business Wire
AMD stock dropped 6.6% to $462.27 during late-morning trade. According to Reuters, the decrease mirrored softness seen in other chipmakers, reducing the potential for the move to be attributed to any particular deal.
Risks persist. Revenue is expected to start in 2027, subject to factors such as construction, electricity, permitting, and customer credit. Additional warrant vesting may increase the number of shares.
The deal gives Core Scientific a more robust revenue composition and reduces its prospective reliance on CoreWeave. However, it introduces indirect counterparty risk, significant construction expenses and the possibility of dilution. Tuesday’s market move did not settle that balance.
What is causing AMD shares to tumble so steeply today?
AMD shares were down 6.9% at $460.70 as of 11:43 a.m. ET on July 28, trading between $442.27 and $481.85 during the session. The Philadelphia Semiconductor Index had lost 4% earlier in the day. Micron shares dropped 6.4% as investors assessed the payoff from AI investments. Increased competition from Chinese chipmakers continued to pressure the market. Reuters A deal between Core Scientific and AMD failed to lift sentiment, as details of the agreement remained confidential.
When is AMD scheduled to announce earnings, and what are expectations?
AMD is set to announce its second-quarter results after markets close on August 4, 2026. Management will host a conference call starting at 5:00 p.m. ET. Advanced Micro Devices, Inc. The company projects revenue of $11.2 billion, with a variance of plus or minus $300 million. That midpoint marks a 46% gain from a year earlier and a 9% rise from the previous quarter. AMD's outlook also signals a non-GAAP gross margin around 56%. Advanced Micro Devices, Inc. The consensus from 27 analysts places revenue at $11.3 billion and EPS at $1.61. Forecasts may still shift before AMD releases its results.
How solid was AMD’s performance in the first quarter?
Revenue for the first quarter totaled $10.253 billion, an increase of 38% from a year earlier. Data Center segment revenue surged 57% to $5.775 billion, accounting for approximately 56% of overall revenue. Non-GAAP earnings climbed 43% to $1.37 per share. GAAP gross margin widened by three percentage points to 53%. Advanced Micro Devices, Inc. Operating cash flow stood at $2.955 billion, compared with $939 million in the year-ago period.
Can AMD’s latest AI agreements significantly boost revenue in 2027?
Meta has agreed to use as much as six gigawatts of AMD GPUs, with Reuters estimating the value of the deal at up to $60 billion over five years. Advanced Micro Devices, Inc. Anthropic will purchase up to two gigawatts beginning in 2027, while AMD could invest as much as $5 billion, depending on deployment progress. Reuters Core Scientific will supply more than 500 megawatts from 2027 onwards, with potential to expand this to 2.5 gigawatts; terms of this financial arrangement have not been made public. Reuters The actual revenue generated will depend on deployment timelines, purchase volumes and commercial agreements.
How will the Helios launch impact the upcoming two quarters?
AMD reports Helios systems have entered full-scale production. Initial deliveries are set to launch toward the end of the third quarter. Helios features MI455X accelerators paired with Venice server CPUs. OpenAI is preparing to deploy Helios racks before the end of the year. Reuters As a result, guidance for the third quarter outweighs historical second-quarter performance. Any setbacks in production could challenge management's claims of robust demand.
Does AMD's valuation remain high even after today's decline?
AMD's shares traded at $460.70, valuing the company around $760.2 billion. The trailing price-to-earnings ratio was about 151.0, based on earnings per share of $3.05. Reuters noted the shares more than doubled from the start of 2026 until July 22. Reuters That market cap is based on expectations for swift AI revenue growth and margin gains. AMD aims for revenue CAGR above 35% and non-GAAP operating margin above 35%. Non-GAAP earnings per share are targeted to surpass $20 in the future. These are long-term targets and do not represent short-term guidance or assured results.
What potential dilution might result from AMD’s customer warrants?
AMD separately issued warrants to OpenAI and Meta, each covering 160 million shares with an exercise price of $0.01, subject to purchase commitments and share price targets. Advanced Micro Devices, Inc. If all are exercised, AMD's total share count for April could rise by roughly 19.6%. As of March 28, none of these warrants had vested or were exercisable. AMD still had $9.2 billion remaining on its share repurchase authorization at that time. Advanced Micro Devices, Inc. The warrants are not yet effective, but the possible increase in shares would be significant.
Is AMD’s balance sheet strong enough to support its AI growth plans?
AMD reported $12.3 billion in cash and short-term investments as of March 28, while its debt stood at $3.3 billion, resulting in an estimated $9.0 billion in net cash. Unconditional commitments were $25.7 billion, including $18.3 billion due in 2026. The company also had $4.4 billion in leases not yet started and $4.1 billion in guarantees. Advanced Micro Devices, Inc. AMD’s investment in Anthropic could rise by up to $5 billion if performance milestones are achieved. Reuters Investors await revised guidance on AMD's cash deployment when it reports August 4.
What external developments might impact AMD ahead of its earnings report?
Results from Microsoft, Meta, Apple and Amazon are expected later in the week, with their AI investment plans serving as clear indicators for accelerator suppliers. The Federal Reserve will unveil its rate decision on Wednesday, July 29. According to LSEG data, traders see a 37% probability of a rate hike. The semiconductor index remains over 20% lower than its June peak. Performance updates from peers and shifts in rate outlooks are likely to be key drivers for AMD in upcoming sessions.
Shan Ahmed Khan is a senior markets reporter at TS2.tech. His coverage ranges from stocks and technology to economic developments across global markets. He worked in investment research and market analysis before becoming a financial journalist and is a graduate of the Lahore University of Management Sciences (LUMS).
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