AMD's stock tumbled 8.2% to $479.24 during midday trading on Monday, dragged down by a broad semiconductor selloff fueled by worries around AI infrastructure investments.
The initial spark came from Intel’s earnings release last Friday. Despite reporting its fastest revenue growth in about 15 years, Intel’s shares dropped sharply after the company raised its capital expenditure forecast and disclosed ongoing foundry losses. Investors saw this as a warning sign that growing revenue alone won’t satisfy market demands proof of AI spending translating into profits is now essential.
Adding to the pressure, Alphabet revealed a significant increase in its AI capital expenditures projected for 2026. This raised concerns over the sustainability of rising costs among hyperscale cloud providers, tightening free cash flow and unsettling chip investors.
AMD’s Upcoming Earnings and Market Sentiment
With AMD’s earnings report scheduled for August 4, investors are already adjusting positions. Wall Street’s focus is on data center growth and demand for AMD’s MI-series GPUs, key indicators of AI-related business momentum. Given the prevailing uncertainty, many are reducing exposure to volatile chip stocks ahead of the results.
Investor confidence has also been tested by insider selling. Over the past three months, AMD insiders offloaded more than $141 million worth of stock, including CEO Lisa Su’s sale of 125,000 shares at $460.69 each in June under a pre-arranged plan.
The Nasdaq Composite dropped about 0.5% on the day, mostly driven by tech and semiconductor declines, while the Dow Jones remained slightly positive. This points to sector-specific weakness rather than a broad market downturn.
Still, analysts remain optimistic. Mizuho recently raised its price target on AMD to $625 with an Outperform rating. Bank of America lifted its target to $620 with a Buy rating, Stifel Nicolaus set theirs at $635, and Citigroup upgraded AMD to Buy. Among 44 tracked analysts, the majority rate AMD as a Buy or Strong Buy, with an average price target around $522.
AMD’s last quarterly report in May showed revenue of $10.25 billion, up 37.8% year-over-year, beating estimates. The stock had opened Monday near $522 before the selloff pushed it lower. Its 52-week trading range spans from $149.22 to $584.73.
This content is for informational purposes only and does not constitute financial advice.
