Advanced Micro Devices’ (AMD) stock whipsawed in early trading Wednesday morning as investors digested the company’s better-than-anticipated Q1 earnings report and stronger-than-expected outlook Tuesday.

But analysts were torn about AMD’s path forward, with Bank of America upgrading the company to a Buy and others, like Jefferies, lowering their price target on the firm due to concerns about AI growth for the year.

Shares of AMD jumped as much as 4.9% at the start of trading on Wednesday before paring gains and dropping back to below 1%.

For the quarter, the AI chipmaker and Nvidia (NVDA) rival saw adjusted earnings per share (EPS) of $0.96 on revenue of $7.4 billion, ahead of analysts’ expectations of $0.94 on revenue of $7.1 billion, based on Bloomberg consensus estimates. The company reported EPS of $0.62 and revenue of $5.4 billion in the same quarter last year.

The company also said it anticipates Q2 revenue of between $7.1 billion and $7.7 billion. Analysts were anticipating $7.2 billion.

Analyst Vivek Arya cited AMD’s “strong” sales outlook for the second quarter “despite China headwinds.” Arya raised his price target on AMD stock to $120 while shares traded around the $100 level Wednesday morning.

In April, AMD, like Nvidia, announced that the Trump administration instituted tighter export controls on AI chips destined for China. The move effectively cuts off AMD’s ability to ship its MI308 AI processor to the region and, according to the company, might result in as much as an $800 million charge on inventory, purchase commitments, and related reserves.

AI chip companies are also staring down the government’s AI diffusion rules, which would require certain countries to acquire special licenses to gain access to a limited number of US AI chips.

“Despite the dynamic macro and regulatory environment, our first quarter results and second quarter outlook highlight the strength of our differentiated product portfolio and consistent execution positioning us well for strong growth in 2025,” AMD CEO Lisa Su said in a statement.

AMD’s earnings results follow rival Intel’s (INTC) report, which saw the company beat on the top and bottom lines but issue lighter-than-anticipated revenue guidance in the second quarter. At the time, Intel CFO David Zinsner blamed the “current macro environment” for creating “elevated uncertainty across the industry.”

Nvidia will report its earnings on May 28.

AMD’s Data Center segment revenue topped $3.7 billion, versus expectations of $3.6 billion. The segment generated $2.3 billion in Q1 last year.

Shares of AMD are off 18% year to date and 36% over the past 12 months. Nvidia is down 15% year to date but up 22% over the past year.

AI stocks took a major hit over the past few months on fears that the trade has been overhyped. DeepSeek’s January announcement that it managed to produce high-performance AI models using less than top-of-the-line chips further hammered chip stocks.

AMD’s Client segment, which includes revenue from sales of laptop and desktop chips, saw $2.3 billion in revenue for the quarter. Analysts were anticipating $2 billion and up from $1.3 billion in Q1 last year.

PC makers produce a number of their products in China, which is subject to a 145% tariff, as well as Vietnam and Malaysia. Computers are currently exempt from Trump’s tariffs, but the administration has said it could implement duties on semiconductors based on the results of the Commerce Department’s Section 232 investigation.

AMD’s gaming business, which includes sales of GPUs and semi-custom chips for video game consoles, brought in $647 million versus expectations of $540 million.

Sony’s (SONY) and Microsoft’s (MSFT) consoles are approaching the second half of their life cycles, which generally means sales slide versus when they initially hit the market. Companies are also raising prices on the systems to contend with tariffs.

Unlike laptops and desktops, consoles aren’t exempt from duties. As a result, Microsoft announced it is raising the price of its Xbox Series X by $100 to $599. The company also said it’s raising the price of some of its first-party games to $79 from $69.

Sony has increased the price of its PlayStation in Europe, but not in the US.