What Happened?
Shares of computer processor maker AMD (NASDAQ: AMD) fell 4.3% in the afternoon session after investors rotated out of AI-linked high-flyers following underwhelming earnings updates from Oracle and Broadcom as the core thesis shifted from "growth at any cost" to "prove the returns."
Oracle triggered the alarm by missing revenue estimates while simultaneously hiking capital expenditures by $15 billion. This reignited fears that AI infrastructure spending is outpacing actual monetization. Broadcom compounded the anxiety; despite beating earnings, its stock fell as CFO Kirsten Spears cautioned that gross margins may come under pressure as product mix shifts further toward system-level AI sales. This sparked a macro rotation away from AI infrastructure and power plays. High-valuation names like AMD, Vertiv, and Bloom Energy fell as markets looked to sectors that can benefit from the recent Fed rate cut and a resilient economy.
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What Is The Market Telling Us
AMD’s shares are very volatile and have had 28 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 3.8% on the news that the company was impacted by disappointing earnings from cloud company Oracle and a recent U.S. policy shift benefiting its competitor, Nvidia.
Weak revenue and guidance from Oracle, a major AMD supporter, sparked concerns about a slowdown in enterprise spending on artificial intelligence. The results signaled that the era of spending on AI at any cost might be pausing, prompting fears that companies with tightening budgets would stick with the market standard, Nvidia, instead of experimenting with alternatives like AMD. Adding to the pressure, the White House recently authorized Nvidia to ship certain advanced chips to China. This decision effectively removed a large market opportunity that AMD had expected to fill with its own chips designed to comply with previous restrictions.
AMD is up 77.1% since the beginning of the year, but at $213.67 per share, it is still trading 19.2% below its 52-week high of $264.33 from October 2025. Investors who bought $1,000 worth of AMD’s shares 5 years ago would now be looking at an investment worth $2,254.
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