This article first appeared on GuruFocus.
AMD (AMD, Financials) is facing its weakest monthly stock performance in more than two years as competition and cost pressures weigh on sentiment despite strong results. Shares fell nearly 16% in November after reports that Meta is considering adopting Google’s Tensor Processing Unit chips for its data centers, raising concerns that demand could shift away from both AMD and Nvidia. Analysts said such a move represents a modest but notable competitive challenge.
The decline follows a quarter in which AMD reported record revenue of $9.25 billion, a 36% increase from a year earlier. The company also projected rapid growth in its data-center segment, with CEO Lisa Su forecasting an average expansion rate near 80% annually driven by rising demand for AI accelerators. Shares briefly rebounded this week, closing at $214.24 on Wednesday, and remain up 77% year to date.
Rising memory-chip prices have added to pressure, with DRAM contract pricing up 171% from last year as manufacturers prioritize high-end AI components. Broader valuation concerns have also weighed on technology stocks after central-bank warnings that investor optimism around AI may be overstated.
