Advanced Micro Devices (NASDAQ:AMD) Shares Down 7.5% - Here's Why

Key Points

• AMD shares dropped 7.5% to $466.84 amid concerns about Intel’s warning, potential weakness in the PC market, tighter memory supply and elevated semiconductor costs.
• Tuesday’s earnings report is the key near-term catalyst. Investors will assess whether strong AI accelerator and EPYC server demand can offset PC softness, with options markets signaling unusually high post-earnings volatility.
• Despite the selloff, analysts remain broadly positive, with a consensus “Moderate Buy” rating and average price target of $608.78. However, AMD’s roughly 120 price-to-earnings ratio has fueled concerns that AI expectations and valuation are stretched.

Advanced Micro Devices, Inc. (NASDAQ:AMD - Get Free Report) shares fell 7.5% during trading on Monday. The stock traded as low as $466.07 and last traded at $466.84. 31,604,164 shares were traded during trading, a decline of 0% from the average session volume of 31,686,049 shares. The stock had previously closed at $504.80.

Key Stories Impacting Advanced Micro Devices

Here are the key news stories impacting Advanced Micro Devices this week:

• Positive Sentiment: AMD’s growth outlook remains supported by strong demand for AI accelerators and rising adoption of its EPYC server processors. Analysts will look for evidence that data-center momentum can offset softness in PCs. Buy, Sell or Hold AMD Stock? Key Tips Ahead of Q3 Earnings
• Positive Sentiment: Morgan Stanley raised its AMD price target from $465 to $510 while maintaining an Equal Weight rating, signaling some analysts see additional upside if earnings and guidance meet expectations. Morgan Stanley AMD Recommendations
• Positive Sentiment: AMD and Nvidia Ventures backed AI startup Hark at a reported $6 billion valuation, potentially reinforcing AMD’s strategic position in the expanding AI ecosystem. Nvidia and AMD Are Backing Hark
• Neutral Sentiment: Tuesday’s earnings release is the immediate catalyst. Options activity indicates unusually high volatility and a meaningful risk of a post-earnings move in either direction. Barchart AMD Earnings Analysis
• Negative Sentiment: Intel’s warning has increased concern that weakness in the PC market could spread to AMD, while tighter memory supply and higher prices may pressure costs across the semiconductor industry. AMD Slides Ahead of Earnings as PC Worries Linger
• Negative Sentiment: Bearish commentary highlights AMD’s stretched valuation—approximately 120 times earnings in the supplied market data—and fears that AI-related expectations and financing activity have become excessive. Some analysts also recently reduced semiconductor price targets. AMD and Micron Selloff Is Just the Beginning

Analyst Ratings Changes

A number of equities research analysts have recently weighed in on the stock. Bank of America lifted their price target on shares of Advanced Micro Devices from $620.00 to $720.00 and gave the company a "buy" rating in a research report on Friday, September 25th. The Goldman Sachs Group increased their price objective on shares of Advanced Micro Devices from $450.00 to $640.00 and gave the stock a "buy" rating in a research note on Monday, July 6th. DA Davidson raised their target price on shares of Advanced Micro Devices from $425.00 to $550.00 and gave the company a "buy" rating in a report on Wednesday, August 5th. Sanford C. Bernstein reaffirmed an "outperform" rating and set a $650.00 price target on shares of Advanced Micro Devices in a report on Wednesday, August 5th. Finally, Citigroup upped their price target on shares of Advanced Micro Devices from $575.00 to $800.00 and gave the stock a "buy" rating in a report on Tuesday, October 6th. Three analysts have rated the stock with a Strong Buy rating, thirty-one have assigned a Buy rating, eight have issued a Hold rating and one has given a Sell rating to the company's stock. According to MarketBeat, the company currently has a consensus rating of "Moderate Buy" and an average price target of $608.78.

Advanced Micro Devices Stock Performance

The company has a current ratio of 2.61, a quick ratio of 1.91 and a debt-to-equity ratio of 0.03. The firm has a market capitalization of $762.10 billion, a price-to-earnings ratio of 120.01, a PEG ratio of 5.18 and a beta of 2.45. The stock's 50-day moving average is $548.29 and its 200-day moving average is $409.20.

Advanced Micro Devices (NASDAQ:AMD - Get Free Report) last issued its quarterly earnings data on Tuesday, August 4th. The semiconductor manufacturer reported $1.66 earnings per share for the quarter, topping analysts' consensus estimates of $1.62 by $0.04. The business had revenue of $11.54 billion for the quarter, compared to analyst estimates of $11.31 billion. Advanced Micro Devices had a return on equity of 12.30% and a net margin of 15.58%. Advanced Micro Devices's quarterly revenue was up 50.1% compared to the same quarter last year. During the same quarter in the previous year, the company posted $0.48 EPS. On average, analysts predict that Advanced Micro Devices, Inc. will post 6.50 EPS for the current fiscal year.

Insider Activity at Advanced Micro Devices

In related news, EVP Paul Grasby sold 15,000 shares of the business's stock in a transaction on Monday, August 17th. The shares were sold at an average price of $514.91, for a total value of $7,723,650.00. Following the sale, the executive vice president owned 117,687 shares of the company's stock, valued at $60,598,213.17. The trade was a 11.30% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, EVP Forrest Norrod sold 17,262 shares of the stock in a transaction dated Thursday, October 15th. The shares were sold at an average price of $540.70, for a total value of $9,333,563.40. Following the completion of the sale, the executive vice president directly owned 353,317 shares of the company's stock, valued at approximately $191,038,501.90. The trade was a 4.66% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 231,100 shares of company stock valued at $114,867,400 in the last quarter. Insiders own 0.50% of the company's stock.

Hedge Funds Weigh In On Advanced Micro Devices

Hedge funds have recently bought and sold shares of the company. Southpoint Capital Advisors LP boosted its holdings in Advanced Micro Devices by 50.0% in the first quarter. Southpoint Capital Advisors LP now owns 900,000 shares of the semiconductor manufacturer's stock worth $183,087,000 after acquiring an additional 300,000 shares in the last quarter. Dimensional Fund Advisors LP boosted its holdings in Advanced Micro Devices by 6.0% in the first quarter. Dimensional Fund Advisors LP now owns 5,142,516 shares of the semiconductor manufacturer's stock valued at $1,045,954,000 after purchasing an additional 291,165 shares during the last quarter. Ferguson Wellman Capital Management Inc. grew its holdings in Advanced Micro Devices by 6,968.7% during the third quarter. Ferguson Wellman Capital Management Inc. now owns 140,313 shares of the semiconductor manufacturer's stock worth $85,995,000 after acquiring an additional 138,328 shares during the period. Douglas Lane & Associates LLC increased its holdings in shares of Advanced Micro Devices by 2,748.0% during the 3rd quarter. Douglas Lane & Associates LLC now owns 85,952 shares of the semiconductor manufacturer's stock valued at $52,582,000 after purchasing an additional 82,934 shares in the last quarter. Finally, Nan Shan Life Insurance Co. Ltd. increased its holdings in Advanced Micro Devices by 1,288.6% in the second quarter. Nan Shan Life Insurance Co. Ltd. now owns 220,170 shares of the semiconductor manufacturer's stock valued at $127,899,000 after buying an additional 204,315 shares in the last quarter. Institutional investors own 71.34% of the company's stock.

Advanced Micro Devices Company Profile

Advanced Micro Devices, Inc NASDAQ: AMD is a global semiconductor company that designs high-performance computing, graphics and adaptive computing products. Its offerings serve data centers, personal computers, gaming systems, embedded markets and other specialized applications.

AMD's product portfolio includes Ryzen processors for desktop and notebook computers, EPYC server processors, Radeon graphics processing units, and Instinct accelerators for artificial intelligence and high-performance computing.

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