Key Points
Advanced Micro Devices (NASDAQ: AMD) stock is losing ground in Friday’s trading. The company’s share price had fallen 4.2% as of 2 p.m. ET. At the same point in the day’s trading, the S&P 500 had pulled back 0.7%, and the Nasdaq Composite was down 1.3%.
AMD stock has continued to lose ground as investors react to concerns that valuations for artificial intelligence (AI) companies have become overheated. Even with today’s pullback, the stock has still managed to climb 89% across 2025’s trading as of this writing.
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AMD stock falls as tech sector confidence slips
Tech stocks are falling again this Friday as investors weigh the potential for more near-term volatility for tech sector valuations and react to another potentially bearish macroeconomic indicator. The University of Michigan recently published a report showing that U.S. consumer confidence had slipped to its weakest levels since 2022. Along with weakening confidence in the strength of bullish momentum for AI stocks, the report is driving sell-offs for AMD stock today.
What’s next for AMD?
For the current quarter, AMD’s midpoint sales target calls for revenue of approximately $9.6 billion. With that guidance, the company is forecasting year-over-year revenue growth of approximately 25%. Meanwhile, the chip specialist is targeting a non-GAAP (adjusted) gross margin of approximately 54.5%. There are signs that the company’s recent contract wins with companies including Amazon and OpenAI are poised to power an acceleration for sales growth.
On the other hand, valuations across the broader AI space could continue to be volatile in the near term. Indications that AMD could begin winning market share from Nvidia in AI processors make the stock a potentially worthwhile play for risk-tolerant investors with a long-term time horizon, but buyers should move forward with the understanding that more big valuation swings could hit the stock in the near term.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, and Nvidia. The Motley Fool has a disclosure policy.