What Happened?
Shares of computer processor maker AMD (NASDAQ: AMD) fell 3.1% in the morning session after stocks in the semiconductor sector pulled back triggered by a weak forecast from peer chipmaker Marvell Technology.
Marvell's disappointing outlook, which it attributed to a slowdown in its custom AI chip business, soured investor sentiment across the industry. The news put pressure on the entire semiconductor sector, with AMD and other major chipmakers like Nvidia also seeing notable drops. The downturn was also influenced by some investors apparently locking in recent gains from the popular "AI trade," which has driven much of the market's recent performance. This profit-taking, combined with Marvell's cautious guidance, contributed to the negative pressure on chip stocks during the session.
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What Is The Market Telling Us
AMD’s shares are very volatile and have had 23 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 3 days ago when the stock gained 3.9% on the news that the company received a key analyst upgrade and announced a major partnership with IBM to develop next-generation computing technologies. Truist Securities upgraded AMD's stock to 'Buy' from 'Hold' and increased its price target to $213 from $173. The firm highlighted improving industry sentiment and traction for AMD's data center and Artificial Intelligence (AI) products, noting that large-scale cloud customers are showing “true interest in deploying AMD at scale.” Separately, AMD and IBM announced a collaboration focused on quantum-centric supercomputing. The partnership aims to combine AMD's high-performance CPUs and GPUs with IBM's advanced quantum computer systems, creating scalable platforms that could redefine the future of high-performance computing.
AMD is up 35.1% since the beginning of the year, but at $162.97 per share, it is still trading 11.6% below its 52-week high of $184.42 from August 2025. Investors who bought $1,000 worth of AMD’s shares 5 years ago would now be looking at an investment worth $1,794.
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