AMD Stock Drops as AI Slowdown Fears Impact Chipmakers
AMD's stock closed near $512, roughly flat for the week but about 12% below its 52-week high of $585. The decline was driven by broader industry concerns over potential slowdowns in AI development rather than any specific issues with AMD’s business performance. In Q2, AMD reported strong results including a data center revenue surge of 107% year-over-year to $6.7 billion and an expanded non-GAAP gross margin of 56%. The company also raised its guidance for the current quarter, forecasting revenue near $9 billion with expectations that data center segment revenue will more than double in 2027. AMD is working on strengthening its inference capabilities through strategic moves like acquiring Toronto-based startup Taalas. A valuation model suggests a target price of $586 based on assumptions including 35% annualized revenue growth and an exit P/E multiple of 45.6x, implying potential upside for the stock.
Topics: acquisition AI slowdown fears AMD chipmakers data center revenue