Wall Street analysts are predicting AMD shares may have reached the end of their rally. Generac stock plummets after reporting mixed earnings and slashing sales outlook. Lastly, E.l.f. Beauty shares jump up after topping profit estimates. Yahoo Finance's Seana Smith and Josh Scahfer examine several stocks trending after the closing bell.

This post was written by Luke Carberry Mogan.

Video Transcript

SEANA SMITH: Let's take a look at some of the big movers.

First up, AMD, shares closing lower this afternoon.

Wall Street is not sold on the company's second quarter earnings.

Several firms, including Bank of America and JP Morgan, saying that the company may be nearing the peak of its rally.

Bank of America specifically saying that the company is too fixated on the acceleration of its AI business.

AMD posted better-than-expected results in the latest quarter.

CEO Lisa Su saying that she does see a recovery in the PC market.

That, of course, would help AMD.

Now, Josh, we also have to point out that semiconductors were among the hardest hit in the broader trading action today when we take a look at some of the risk-off bets that we were seeing from traders following that downgrade from Fitch.

But again, a notable decline for AMD.

And AMD among the worst performers in the chip space.

JOSH SCHAFER: Well, it's the AI story, right?

So you take a look at AMD year-to-date, up over 80%, right?

It's one of those high-flying semiconductor stocks in the AI story, like Nvidia.

And when you look at what they're sort of promising with AI here, we've seen this trend throughout earnings thus far.

If AI is not currently contributing to revenue, if you can't say that this quarter it helped, some of those stocks are trading off a little bit and giving back some of the gains that we've seen from the year, because a lot of the story here and what a lot of the Street analysts were talking about, a lot of those people still putting buys on AMD after earnings are saying, well, wait for 2024, wait for 2025.

AMD is saying that its data centers could be at $150 billion in revenue by 2027.

The projections are still there the story hasn't changed.

It's just not exactly coming right now.

And if you expected it to come right now, then I guess maybe you're taking some profits today.

SEANA SMITH: Yeah.

And this is a total reversal from what we saw initially after the earnings crossed yesterday and even after that conference call-- the earnings call, excuse me, was held, because there was a lot of excitement about their plans around AI and what they were doing in this space.

The fact that they were laying out these very lofty goals, $150 billion, like you just mentioned, by 2027 when it comes to AI accelerators in data centers, I initially thought that the Street's reaction was, hey, they could be a real viable competitor here to Nvidia, maybe potentially take some of that market share.

Although the tone, though, has seemed to shift today when we're looking at a loss of just about 7%.

JOSH SCHAFER: Right.

And you also have Nvidia off 5%, though, today, too.

And I think that has been the tone, Seana, right?

Is AMD the next player?

So it'll be interesting to see, I think, over the next couple of months, maybe not on the day of a fixed downgrade of US credit, how AMD's stock reacts, because I think it might be a little different over the longer term.

But I want to take a look at shares of Generac closing deep in the red, the worst performer in the S&P 500 today.

The company warning of sharp sales declines in the second half of the year, blaming weak consumer demand.

Generac did beat revenue expectations for its second quarter despite sales falling 23% from a year ago.

But really, the key number here, Seana, was that guidance for the next quarter there-- or the full year, they're expecting sales to decline between 10% to 12%.

They had initially been expecting sales to decline between 6% to 10%.

So they think it's going to be worse than initially feared.

That's never good in terms of guidance.

SEANA SMITH: It's never good.

And it was also interesting that they have weaker than expected residential sales just in terms of their guidance and what they're expecting here going forward.

KeyBank did note that some of the weakness that we have seen in the residential business, some of that is being offset by strength in commercial and industrial products.

But you're right, the guidance, the big driver on this move that we saw in the stock.

Today was the biggest decline, I believe, that we have seen in Generac since October when we take into account the fact that the stock dropped over 24%.

Expectations were very high going into this quarter.

The stock was up just about 15% year-to-date.

And Generac unable to meet those-- JOSH SCHAFER: It's interesting when you think about the commentary, too, right?

CEO Aaron Jagdfeld calling it, he called part of Generac's product in here backup power solutions and talking about consumer demand being down in something that's backup power solutions.

And we think about overall spending here, just wondering where consumers are willing to maybe not spend.

And if it isn't your first generator or your first source of power, maybe until your power goes out, you're not buying a backup generator in the current environment as people do spend a little bit less money.

Interesting point, I thought.

SEANA SMITH: Yeah.

That is a very interesting point and important to point out, especially in the climate that we're in right now.

All right.

Let's also take a look at ELF shares closing higher after the company raised its outlook, and profit came in nearly double what analysts were expecting.

Shares have more than doubled year-to-date.

And their CEO saying that the company is, quote, "just in the early innings of unlocking their full potential."

He told us that after the last quarter as well.

We're looking at significant gains, so doubled since the start of the year, more than tripled in the past year.

Their guidance was impressive.

And Bank of America even noted that the raised guidance, they felt, was still conservative.

Really speaks to the explosive growth that we've seen in ELF.

JOSH SCHAFER: Revenue up 76% from the same quarter last year.

I mean, that's just a massive number, 18 straight quarters of net sales growth and market share gains.

They beat the Street by-- the Street had been expecting $184 million in revenue.

They came in at $216 million in revenue.

When we've seen stocks move more on sales this quarter, it seems like that's been the driver more so than EPS.

And you get a big sales beat like this, and you project more sales, not shocking to see the stock flying higher here.

And another thing I'll point out that we always talk about with these retail names.

ELF talking a lot about digital growth, which I found very interesting on this call.

They're talking a lot about how they're getting more consumers to buy digital, getting them in the game that way.

And then you can get people to-- people like digital sales.

It's a hot thing in retail to be able to get people in that ecosystem and then continue to sell to them, offer new products.

So it's sort of a growth engine to watch for ELF there.

SEANA SMITH: Yeah.

You almost need to be in that position in order to excel in this type of environment.

But again, I think ELF is very well-positioned, given the fact that many of their products are on the lower end of the price range.

So people are still spending, many might downgrade or I guess trade down, you should say, to an ELF product, just because they're better priced.

And if they're looking-- JOSH SCHAFER: But you're still going to buy the makeup.

SEANA SMITH: Still got to buy the makeup.

JOSH SCHAFER: People are still buying makeup no matter what.

SEANA SMITH: I'll still say that makeup is recession-proof.

All right, Josh, thanks so much.