Shares of Advanced Micro Devices (AMD) closed at $250.05, down 3.7% on Tuesday, and extended losses to $238.08 in pre-market trading on Wednesday, a further 5.3% decline as investors continued to take profits following a strong earnings report. The decline came even as the chipmaker reported better-than-expected third-quarter earnings and secured new bullish commentary from major Wall Street firms, including UBS, which lifted its price target to $300.
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The drop reflects a classic case of profit-taking after a strong rally. AMD stock has gained more than 30% in the past three months, fueled by optimism around AI chips and a long-term supply deal with OpenAI. Many traders appear to be locking in gains ahead of the next round of macroeconomic data and sector earnings, which could inject fresh volatility into the broader semiconductor market.
Valuation and Market Context Pressure the Stock
While AMD’s results were solid, some investors pointed to high expectations that may have left little room for upside surprise. The company’s guidance was in line with forecasts rather than sharply higher, which can weigh on a stock that has already priced in a strong AI future.
Analysts also noted that broader market weakness is playing a role. Technology shares have been under pressure as investors rotate out of high-growth names amid renewed concerns about stretched valuations and global demand for chips. With Nvidia (NVDA), Intel (INTC), and other peers also facing selling pressure, AMD’s dip appears more connected to sentiment than fundamentals.
Is AMD a Good Stock to Buy?
Despite the pullback, Wall Street remains confident about AMD’s longer-term story. Based on 39 Wall Street analysts offering 12-month price targets for Advanced Micro Devices (AMD) in the past three months, the stock holds a Moderate Buy consensus rating. Out of these, 29 analysts rate AMD a Buy, 10 recommend a Hold, and none suggest a Sell.
The average 12-month AMD price target stands at $255.77, representing a potential 2.3% upside from the latest closing price.
AMD’s decline this week looks less like a loss of faith and more like a pause in a strong uptrend. Investors remain bullish on its AI exposure and long-term partnerships, but near-term volatility could persist as traders rebalance portfolios and assess whether the next wave of AI spending justifies current valuations.
