What Can Trigger Advanced Micro Devices Stock’s Slide?
Advanced Micro Devices (AMD) has stumbled before. It’s stock plunged > 30% in span of less than 2 months 14 times in multiple years, wiping out billions in market value, and erasing massive gains in single correction. If history is any guide, Advanced Micro Devices (AMD) stock isn’t immune to sudden, sharp downturns.
The Risk That Is Brewing“`html
- NVIDIA AI Dominance: NVIDIA is expected to retain 80-90% market share in AI compute chips through 2025. While AMD’s MI350 series ramps in Q3 2025, NVIDIA’s lead and ecosystem remain formidable.
- ARM in Servers/PCs: ARM-based servers are projected to account for 21.1% of global shipments in 2025. Qualcomm Snapdragon X chips secured 10% of high-end Windows PCs in Q1 2025, targeting 50% of the market in 5 years.
- Intel’s Client CPU Hold: Intel maintains ~75.7% overall client CPU market share (avg Q1/Q2 2025) and a substantial 79.7% in mobile CPUs, despite AMD’s desktop gains to 32.2% in Q2 2025.
“`Stocks can be volatile, but markets aren’t spared either – 2008, 2020. Volatility happens. See how Empirical Asset Management‘s allocation framework handled both.
Is Risk Showing Up In Financials Yet?
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It certainly helps mitigate the risk if the fundamentals check out. For details on AMD Read Buy or Sell AMD Stock. Below are a few numbers that matter.
- Revenue Growth: 27.2% LTM and 11.7% last 3-year average.
- Cash Generation: Nearly 13.7% free cash flow margin and 8.3% operating margin LTM.
- Valuation: Advanced Micro Devices stock trades at a P/E multiple of 147.8
- Opportunity vs S&P: Compared to S&P, you get higher valuation, higher revenue growth, and lower margins
| AMD | S&P Median | |
|---|---|---|
| Sector | Information Technology | – |
| Industry | Semiconductors | – |
| PE Ratio | 147.8 | 23.7 |
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| LTM* Revenue Growth | 27.2% | 5.2% |
| 3Y Average Annual Revenue Growth | 11.7% | 5.3% |
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| LTM* Operating Margin | 8.3% | 18.8% |
| 3Y Average Operating Margin | 3.4% | 17.9% |
| LTM* Free Cash Flow Margin | 13.7% | 13.1% |
*LTM: Last Twelve Months
How Bad Can It Really Get?
When thinking about AMD’s risk in tough markets, the numbers tell the story. The stock plunged over 83% during the Dot-Com crash and nearly 92% in the Global Financial Crisis. Even the inflation shock in 2022 hit it hard, with a drop around 65%. Smaller selloffs like 2018 and the Covid dip still knocked it down by roughly 49% and 34%, respectively. So, no matter the positives around AMD, big market selloffs have taken a serious toll.
But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, and outlook changes. Read AMD Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
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