AI Shortfall and Rising Competition Put the AMD Stock Rally Under Threat
A three-month surge in AMD’s stock has hit turbulence, with earnings disappointment and renewed industry competition tempering recent...
Quick overview
- AMD's stock has faced turbulence after a disappointing earnings report, causing shares to drop over 6%.
- The company's AI-driven data center division underperformed, raising concerns about the sustainability of AI-related growth.
- Despite a brief boost from Nvidia's delay in processor production, AMD's stock struggled to maintain upward momentum.
- Increasing competition and geopolitical tensions, particularly with China, pose additional risks to AMD's future growth.
Live AMD Chart
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A three-month surge in AMD’s stock has hit turbulence, with earnings disappointment and renewed industry competition tempering recent investor enthusiasm.
Earnings Jolt and Technical Breakdown
Advanced Micro Devices (NASDAQ: AMD) saw its steep climb from April’s lows lose steam after its latest quarterly report sent shockwaves through the market. Shares tumbled more than 6% in after-hours trading on Tuesday, sliding from around $164.70 to under $160 during the U.S. session. While revenue narrowly topped estimates, the performance of AMD’s AI-driven data center division came in weaker than expected, raising concerns that the fever around artificial intelligence may be cooling.
AMD Chart Daily – Will the SMA Hold the Trend of Break Next Week?
On the technical side, the sell-off pushed AMD’s price below the closely watched 20-day simple moving average (SMA) — a key support level that had held firm since the uptrend began in late April. This drop tested investor conviction after months of steady buying momentum that had lifted the stock over 100% in just three months.
Nvidia Delay Gives AMD a Boost — Briefly
Midweek, reports surfaced that rival Nvidia would delay its next-generation Rubin series processors, originally expected to enter mass production in Q3 2026. The reason: a redesign aimed at better competing with AMD’s upcoming MI450.
This news briefly reinvigorated buying interest, sending AMD back above its 20-day SMA. However, the rebound quickly stalled at resistance above $85, and by Friday, a bearish reversal had shaved nearly 2% off the price, once again putting the moving average under pressure.
Growing Competitive and Geopolitical Pressures
Beyond earnings performance, AMD faces increasing challenges from intensified semiconductor competition and geopolitical headwinds. China, which accounts for roughly 24% of AMD’s revenue and stands as its second-largest market, remains a focal point of risk. Heightened U.S.-China trade tensions, export restrictions on advanced chips, and ongoing supply chain realignments could limit growth opportunities and add volatility to future results.
Market Context and Outlook
AMD’s meteoric rise since April has been fueled by a strong semiconductor market backdrop and easing trade tensions earlier in the year. Yet, the combination of softer-than-hoped AI results, geopolitical risk, and escalating rivalry within the chip industry suggests the rally’s momentum could be running out of steam.
If the 20-day SMA fails decisively for a second time, technical traders warn that AMD’s stock may remain under pressure for a prolonged period, potentially retracing deeper or shifting the trend altogether.
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