The stock price has already dropped by 50% from its peak.What's wrong with AMD?

The stock price of Advanced Micro Devices Inc. (AMD) in the United States has been continuously declining. From the high point on March 8, 2024, to the present, the stock price has dropped by more than 50%.

And judging from the technical chart, this downward trend shows no sign of stopping at all. It is a "weekly chart" level decline.

So, what's wrong with AMD? Today, we can briefly discuss this and analyze whether there is still potential value in the future.

AMD's financial report became the catalyst for its accelerated decline

Regarding this decline of AMD, we need to go back to its third-quarter financial report in 2024. Yes, it's the third quarter, not the fourth quarter.

We can look at it from the node of this financial report release. During the entire downward trend, the third-quarter financial report in 2024 became the catalyst for its accelerated decline.

Let's review the situation at that time. On October 30, 2024, AMD, a major processor manufacturer, announced its third-quarter financial report. Although the performance of that quarter was better than expected, due to the fact that the financial forecast for the fourth quarter did not exceed market expectations, AMD's stock price dropped by more than 10% on the next trading day.

It can be seen that the expected revenue for the fourth quarter was around $7.5 billion, a year-on-year increase of 22% and a quarter-on-quarter increase of 10%, slightly lower than the analysts' expectation of $7.55 billion.

In fact, the difference is not much, but obviously, the market is not satisfied with this financial report. Compared with NVIDIA, I think the market still dislikes its slow growth.

Putting aside the valuation, if NVIDIA and AMD are both presented to you at the same time, which one would you choose? I believe the answer is obvious.

Then, let's continue. Looking at the fourth quarter of 2024, the revenue indicator of its data center in the financial report is even more disappointing.

The revenue of its data center increased by 69% year-on-year, reaching $3.86 billion, but it was lower than the analysts' expectation of $4.14 billion.

The data center is one of the core pillars of AI, and this is also what the market pays the most attention to. However, it failed to meet the expectations in the fourth quarter.

In terms of the quarter-on-quarter increment, it was $500 million and $700 million in the first two quarters respectively, but only increased by $300 million in this quarter, and the growth obviously slowed down.

In addition, combined with the company's guidance for the next quarter, the company's data center business is likely to decline to a certain extent in the next quarter.

Combined with the current market situation, there are already some negative factors:

The emergence of Deepseek may affect the capital expenditure of large cloud service providers
Custom ASIC chips may also erode the market share of computing power chips.

Under the dual impact, the company's guidance for the next quarter is also "lukewarm", and there is even a certain decline on a quarter-on-quarter basis, which further magnifies the market's concerns.

These factors combined have also become one of the reasons for AMD's stock price to accelerate its decline after a slight rebound in 2025.

Is there still investment value in AMD?

In fact, in my opinion, the answer is yes.

Although the performance of AMD chips is indeed not as good as that of NVIDIA, AMD's competitors, they are often more cost-effective and can provide stronger computing power with less investment.

In addition, putting aside the comparison with NVIDIA, AMD's own development should still be stable. It is in the AI industry, which is in the limelight, and it is constantly launching new products and strengthening corporate management.

Currently, AMD's price-to-book ratio is only 2.7, and the forward price-to-earnings ratio is only 15 times. So AMD's stock is not expensive.

At the same time, it performs well in CPU chips for data centers, and the overall trend of AI spending should also contribute to its GPU revenue.

Judging from the current stock price, it is still very attractive.

However, as I said at the beginning, this decline of AMD is a "weekly chart" level decline. Coupled with the current correction of the NASDAQ index in the US stock market and the uncertainty of Trump's policies abroad, such as whether he will strengthen chip restrictions on China and increase various tariffs.

The global financial market is now uncertain, and there are not many companies that can profit from artificial intelligence. Therefore, the investment time in AMD can be extended a bit.

At present, there is still no sign of the decline stopping. If investors want to buy in, I think it is advisable to wait until there are at least two to three consecutive days of significant increases before entering the market, which is still in time.

Of course, currently, AMD is very cheap when the stock price is below $100.$AMD

AMD's financial report became the catalyst for its accelerated decline

Is there still investment value in AMD?

Disclaimer: This is just my opinion based on what I’m seeing. Not financial advice—do your own research before investing.