AMD Beats Q2 Forecast but Faces $1.5B China Hit from US Export Curbs

Local Market Commentary

The JSE Top 40 index closed flat at 84,542.9 points on Tuesday, while the All Share index dipped 0.04% to 92,027.5. South Africa’s private sector showed early signs of stabilisation in April, with the S&P Global PMI rising to 50.0—its first neutral reading since November 2024—driven by slight improvements in sales and supply chains. Meanwhile, Saudi Arabia’s Red Sea Gateway Terminal, backed by the kingdom’s $925 billion sovereign wealth fund, is considering a bid to develop and operate a fresh-produce terminal at Durban’s Maydon Wharf, following Transnet’s request for proposals for a 25-year concession.

European Market Commentary

Britain’s services sector contracted in April for the first time since October 2023, with the S&P Global PMI falling to 49.0 from 52.5, as export sentiment weakened amid U.S. tariff pressures. Meanwhile, the Swiss National Bank signalled readiness to cut rates below zero and intervene in currency markets to counter deflation, after inflation hit a four-year low of 0% in April. In trade developments, the UK and India finalised a landmark free trade agreement aiming to boost bilateral trade by £25.5 billion by 2040, while Ireland’s finance ministry forecast GDP growth of 2% this year if U.S.-EU tariffs persist.

U.S. Market Commentary

US stocks dropped on Tuesday after Treasury Secretary Scott Bessent confirmed trade talks with China have not started, contradicting President Trump’s earlier claims of ongoing negotiations. Bessent later signalled that the US has received "good offers" from other nations on trade deals, providing a midday boost to major stock indexes. Data from the Bureau of Economic Analysis revealed the US trade deficit surged to a record $140.5 billion in March, a 92.6% increase this year, exacerbating recession concerns. Ford and Mattel also suspended their annual forecasts due to heightened economic uncertainty.

Asia Market Commentary

Hong Kong markets surged over 2% to lead Asia-Pacific gains after China’s central bank and regulators announced interest rate cuts and expanded stock market access to boost growth amid trade concerns. The People’s Bank of China will lower the seven-day reverse repo rate by 10 basis points to 1.4%, expected to pull down the loan prime rate accordingly. Additionally, China will allow a further 60 billion yuan ($8.3 billion) from long-term insurance funds to be invested in equities, as part of a broader push to stabilise financial markets.

Commodity Market Commentary

Gold prices fell on Wednesday as optimism surrounding potential U.S.-China trade talks reduced demand for safe-haven assets, while investors prepared for the Federal Reserve's policy meeting later in the day. Meanwhile, oil prices increased as U.S. production showed signs of weakening and demand in Europe and China rose, with buyers returning after prices hit new lows earlier in the week.

Currency Market Commentary

The South African rand remained stable on Tuesday following a PMI survey indicating signs of stabilisation in the country’s private sector in April. The U.S. dollar steadied on Wednesday ahead of the Federal Reserve's policy meeting, while major Asian investors continued to pull back from U.S. assets. Optimism over upcoming U.S.-China trade talks eased trade war concerns, with Fed Chair Jerome Powell expected to emphasise the need for more data before determining the next policy move.

AngloGold Ashanti plc (ANG) +2.18%

AngloGold Ashanti and Gold Fields have mutually agreed to pause discussions regarding the proposed joint venture to combine their Iduapriem and Tarkwa operations in Ghana. Originally announced in March 2023, the initiative had seen substantial engagement with the Ghanaian government. However, AngloGold Ashanti has since identified significant improvements within its standalone mine plan at Iduapriem, which are expected to unlock greater long-term value. Going forward, both companies will focus on optimising their respective operations, with AngloGold Ashanti prioritising the execution of its revised mining strategy. Iduapriem, situated adjacent to Tarkwa, delivered 237,000 ounces of gold in 2024 at a total cash cost of US$1,118/oz.

Gold Fields Limited (GFI) +1.06%

Gold Fields delivered a solid first quarter in 2025, with attributable gold production rising 19% year-on-year to 551koz, despite a 14% quarter-on-quarter decline following a record Q4. All-in sustaining costs (AISC) were US$1,625/oz, while all-in costs (AIC) stood at US$1,861/oz, both reflecting stabilised production volumes. Notable contributions came from South Deep, St Ives, and Salares Norte, although Gruyere experienced a temporary dip due to planned maintenance. The company remains on track to meet full-year guidance, supported by a strengthened balance sheet—net debt reduced to US$1.98 billion, or 0.59x EBITDA. Strategic developments continue at Salares Norte and the Windfall project, alongside the acquisition of Gold Road Resources. ESG performance showed consistent progress across safety, diversity, and emissions, with a mid-point 2030 target review currently underway.

Advanced Micro Devices (AMD) -1.96%

Advanced Micro Devices (AMD) forecasted a $1.5 billion revenue hit this year due to new U.S. restrictions requiring the company to obtain a license for shipping advanced AI processors to China. Despite this, AMD's second-quarter revenue forecast exceeded Wall Street expectations, driven by customers purchasing chips ahead of tariffs. Shares rose 1% in after-hours trading, after fluctuating between a 6% increase and a 3.5% drop. The company expects an adjusted gross margin of 43%, reflecting an 11 percentage-point decline following an $800 million charge related to U.S. tariffs. Like AMD, Nvidia also requires an export license for China and faces a $5.5 billion charge. AMD's China sales account for about a quarter of total revenue, with the export controls expected to reduce 2025 revenue by 5%. The company projected Q2 revenue of around $7.4 billion, surpassing analyst estimates, while reporting a 57% increase in data center sales to $3.7 billion. Total revenue rose 36% to $7.44 billion, and adjusted profit of 96 cents per share beat estimates by 2 cents.

Palantir Technologies (PLTR) -12.05%

Shares of Palantir Technologies (PLTR) fell on Tuesday after its quarterly results and raised forecast failed to meet the high expectations set by Wall Street, following a 63% increase in stock price earlier this year. The data analytics company’s revenue grew 39% year-on-year in Q1 to $883.9 million, with U.S. government revenue rising 45%. Despite exceeding analysts' revenue estimates of $862.8 million, the company’s full-year revenue forecast of $3.89 billion to $3.90 billion fell short of some investor expectations. Palantir’s 12-month forward price-to-earnings ratio is significantly higher at 202.07, compared to Snowflake (131), Salesforce (23.48), and Datadog (54.81).

Lamborghini (VOWG) -0.66%

Italian luxury sports carmaker Lamborghini reported a 29.6% increase in revenue to 895.2 million euros for Q1 2025, driven by strong global demand for its new hybrid models, the Revuelto and Urus SE. Operating profit (EBIT) rose 32.8% to 248.1 million euros, compared to the same period in 2024. Lamborghini delivered 2,967 cars, with notable growth in the Americas (+21%), EMEA (+7% to 1,368 units), and APAC (+14% to 565 units).

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