Shares of Advanced Micro Devices Inc (NASDAQ:AMD) are trading lower Tuesday afternoon, caught in a broader downturn affecting the semiconductor industry. Here’s what investors need to know.
What To Know: The sector-wide pressure appears linked to reports that a massive artificial intelligence infrastructure project is facing significant headwinds, raising concerns about the near-term demand for high-performance chips.
The venture in question, a $500 billion project named “Stargate” by SoftBank and OpenAI, is reportedly scaling back its ambitious goals. Announced six months ago with plans for a $100 billion immediate investment, the project has yet to secure a major data center deal.
According to reports, persistent disagreements between SoftBank and OpenAI over strategy and control have stalled progress, reducing near-term plans to a much smaller facility in Ohio.
The news has dampened investor enthusiasm for chip stocks because mega-projects like Stargate are expected to be a primary driver of future growth. A delay or reduction in scope of such a large-scale build-out could temper the explosive demand for AI accelerators that has propelled stocks like AMD.
While OpenAI has secured capacity elsewhere, the struggles of its flagship joint venture are casting a shadow over the outlook for AI spending, prompting a cautious pullback.
Benzinga Edge Rankings: According to Benzinga Edge stock rankings, AMD shows exceptional strength in several key areas. The company earns an outstanding Growth score of 97.12, signaling powerful forward-looking prospects.
It also posts strong scores for Quality at 79.65 and Momentum at 74.16, suggesting a fundamentally sound business with positive recent market performance. However, these strengths come at a high price, as reflected by a very low Value score of just 11.68. This indicates that, while a high-quality growth name, the stock is considered expensive on a valuation basis.
Price Action: According to data from Benzinga Pro, AMD shares are trading lower by 1.57% to $154.53 Tuesday afternoon. The stock has a 52-week high of $174.05 and a 52-week low of $76.48.
Read Also: Apple’s Online Store Is Now Live In Saudi Arabia, Flagship Stores Coming By 2026
How To Buy AMD Stock
Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.
For example, in Advanced Micro Devices’ case, it is in the Information Technology sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.
Image: Shutterstock
