Advanced Micro Devices ( (AMD) ) has fallen by -7.41%. Read on to learn why.
Advanced Micro Devices (AMD) experienced a significant stock price decline of 7.41% over the past week, largely due to new U.S. export restrictions impacting its business with China. These restrictions require special licenses for shipping advanced AI chips, such as AMD’s MI308, to China, which is a major market for the company. As a result, AMD anticipates an $800 million financial hit, which includes costs from unused inventory and canceled purchase deals.
The U.S. government’s decision to tighten export rules is part of a broader strategy to limit China’s access to advanced computing technology amid escalating trade tensions. This move has not only affected AMD but also its competitor Nvidia, which expects a much larger $5.5 billion loss. Analysts predict that these restrictions could reduce AMD’s earnings per share by approximately 10% in 2025, reflecting the significant impact on the company’s financial outlook.
Despite the current challenges, analysts remain cautiously optimistic about AMD’s long-term potential, with a moderate buy rating on the stock. However, the uncertainty surrounding the approval of export licenses for selling graphics chips to China adds a layer of risk. Investors are advised to keep an eye on developments in U.S.-China trade relations, as these will likely continue to influence AMD’s stock performance and the broader semiconductor industry.