AMD falls 5% ahead of Tuesday earnings as Oracle surges on $553B AI cloud backlog, S&P -0.41%

Advanced Micro Devices Inc. (NASDAQ: AMD) led chip names lower Monday, falling 5.3% to $341.54 ahead of Tuesday's first-quarter earnings report, while Oracle Corp. (NYSE: ORCL) surged 4.9% after Wedbush Securities initiated coverage with an Outperform rating and a $225 price target backed by a $553 billion AI and cloud contract backlog. The S&P 500 slipped 0.41% to 7,200.75 and the Nasdaq Composite shed 0.19% to 25,067.80 as Middle East tensions escalated, with the United Arab Emirates confirming it had intercepted Iranian missiles, pushing West Texas Intermediate crude 4.4% higher to $106.42 a barrel. The PHLX Semiconductor Sector ETF (SOXX) fell 0.79% to $462.06, trimming a 34% one-month gain.

Today's biggest movers

AMD falls 5% as HSBC flags earnings risk ahead of Tuesday report

Advanced Micro Devices Inc. (NASDAQ: AMD) dropped 5.3% to $341.54 in the heaviest-volume chip selloff of the session, with 41.5 million shares changing hands. The selling followed a note from HSBC cautioning that AMD would likely "give up gains on a predictable earnings report," citing the stock's 55% one-month advance as having already priced in the consensus beat. AMD reports first-quarter 2026 results after the close on Tuesday, May 5, with Wall Street expecting earnings per share of $1.28, up 33% year over year, on revenue of $9.88 billion, a 33% increase from a year ago.

Not all analysts share HSBC's caution. DA Davidson's Gil Luria upgraded AMD to Buy from Neutral on Friday and raised his price target to $375 from $220, a 70% jump in a single revision, after lifting his 2026 revenue estimate by $2 billion and his gross profit forecast by $1.5 billion above Street consensus. RBC Capital's Srini Pajjuri also raised his target to $325 from $230 while keeping a Hold rating. The divergence in analyst conviction reflects how far AMD has run and how much of the AI silicon buildout it must still prove to justify current levels.

Oracle surges 5% as Wedbush flags $553B AI cloud backlog

Oracle Corp. (NYSE: ORCL) was the standout winner on Monday, climbing 4.9% to $180.29 and narrowing a year-to-date deficit to 7.9%. The catalyst was a Wedbush Securities initiation at Outperform with a $225 price target. Analyst Dan Ives argued that investors are mispricing Oracle's AI-focused cloud franchise, pointing to a $553 billion contracted backlog tied to AI and cloud agreements, including major deals with OpenAI and Nvidia Corp. Wedbush contends that Oracle's contract-backed spending model eliminates much of the demand uncertainty that weighs on earlier-stage cloud names.

ORCL traded 31.2 million shares, more than double its 90-day average, signaling broad institutional participation in the move. Oracle has underperformed the broader AI software cohort on a year-to-date basis, a gap that Wedbush argues creates a relative value entry as hyperscaler AI infrastructure spending accelerates through 2026.

Datadog and Cloudflare build pre-earnings momentum

Datadog Inc. (NASDAQ: DDOG) gained 4.4% to $146.69, crossing a key technical trendline ahead of its May 7 first-quarter earnings report. The options market has priced in a post-earnings move of plus or minus 15.6%, reflecting elevated uncertainty after a stretch of slower revenue growth guidance in late 2025. The consensus implies roughly 26% upside from current levels, though the bar has moved materially higher given the stock's 26% one-month advance. DDOG traded 6.7 million shares.

Cloudflare Inc. (NYSE: NET) added 3.1% to $224.17 ahead of its own May 7 results. Of the 35 analysts covering the name, 22 rate it a Buy or Strong Buy, with an average 12-month target of $231.85, according to MarketBeat data. The stock trades at a demanding multiple, approximately 182 times forward earnings, a valuation that leaves limited room for a guidance miss.

ARM retreats 4% on Morgan Stanley downgrade and chip design rivalry

Arm Holdings PLC (NASDAQ: ARM) fell 3.8% to $203.26 as investors trimmed exposure ahead of the company's fiscal fourth-quarter earnings on Wednesday, May 6. Morgan Stanley downgraded ARM to Equalweight on April 29, citing near-term risks tied to the company's push into chip manufacturing, a strategic expansion that the bank says complicates ARM's pure-play licensing model. Reports of a potential collaboration between Qualcomm Technologies Inc. and OpenAI to develop a custom chip architecture that bypasses ARM's instruction set added a competitive overhang to the session.

Analysts project ARM Q4 revenue at $1.47 billion with EPS of $0.58. Even after Monday's decline, ARM has gained 77% year to date, and its fiscal year fourth-quarter setup is described by multiple analysts as "challenging" given the extent of expectations already embedded in the share price.

Notable but quieter

Intel Corp. (NASDAQ: INTC) shed 3.9% to $95.78 in routine consolidation after an extraordinary run. INTC is up 143% year to date following its April 23 first-quarter beat, in which revenue of $13.6 billion crushed the $12.36 billion Wall Street estimate and non-GAAP EPS of $0.29 far exceeded the $0.01 consensus. Even after Monday's dip, Intel's market capitalization has passed $470 billion.

ASML Holding N.V. (NASDAQ: ASML) declined 2.9% to $1,386.21. Net system sales to China fell to 19% of the total in the first quarter, down from 36% in the fourth quarter of 2025, as export controls from the United States and the Netherlands constricted the company's largest growth market. TSMC's decision to delay deployment of ASML's High-NA EUV machines until at least 2029 added a longer-dated demand concern, and the company's second-quarter guidance midpoint came in below analyst estimates.

Super Micro Computer Inc. (NASDAQ: SMCI) rose 3.1% to $27.92 ahead of its Q3 earnings on Tuesday, May 5, with analysts projecting 169% revenue growth. The pre-earnings drift came despite a class-action lawsuit alleging SMCI sold $2.5 billion in servers to Chinese customers in violation of export controls and reports of a roughly $1.4 billion Oracle contract cancellation. CrowdStrike Holdings Inc. (NASDAQ: CRWD) gained 3.0% to $469.24, continuing a quiet recovery with no material catalyst cited in analyst notes reviewed Monday.

What to watch tomorrow

AMD reports first-quarter results after the close on Tuesday, May 5; the Street is at $1.28 EPS and $9.88 billion in revenue. Super Micro Computer also reports Q3 results Tuesday. ARM Holdings delivers fiscal Q4 figures Wednesday, May 6. Datadog and Cloudflare both report first-quarter results before the market opens Thursday, May 7. Nvidia Corp. (NASDAQ: NVDA) remains the highest-stakes event on the earnings calendar, with Q1 results scheduled for May 20. On the macro side, Federal Reserve meeting minutes are due Wednesday; any signal on the pace of rate cuts would affect the valuation math on high-multiple AI software names. Oil prices remain a wild card: WTI crude settled above $106 on Monday, a level not seen since early 2025, and any further Middle East escalation could compress risk appetite across the AI sector.

Not investment advice.