Why AMD's stock is having its worst month in three years

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Dow Jones NewsNov 25, 3:23 PM UTC
MW Why AMD's stock is having its worst month in three years

By Britney Nguyen

 

AMD's stock is down 23% in November. Investors are worried about everything from interest rates to rising memory prices to Google's growing momentum in AI.

 

AMD CEO Lisa Su said earlier this month that the chip maker expects the data center TAM to reach $1 trillion by 2030.

 

Advanced Micro Devices' stock could follow up one of its best months in history with its worst month in over three years.

 

There are a few factors weighing on AMD shares (AMD), which are down nearly 23% in November to more than erase gains seen after a well-received investor day earlier in the month. Investors are worried about everything from cost pressure to interest rates to the rapidly evolving competitive landscape in artificial intelligence.

 

See more: AMD's stock is surging as these big numbers excite Wall Street

 

AMD unveiled upbeat projections at its investor day, but Bernstein analyst Stacy Rasgon said after the event that "the real story still hinges on the company's ability to leverage" its first rack-scale offering, Helios, to become a larger and more competitive player in the AI market.

 

"The jury remains out on that, but management is clearly going on the offense with the narrative," Rasgon said in a note at the time.

 

Mizuho desk-based analyst Jordan Klein flagged Monday that AMD's stock experienced a quick rise and fall after that big event. He said the move showed "a lot of weak hands" as "momentum players bailed," while other investors looking to pare back their semiconductor and AI holdings likely saw AMD "as the least safe long" compared to peer stocks.

 

With AMD's 23% stock drop in November so far, it's pacing toward its worst monthly performance since it lost 25% in September 2022.

 

AMD isn't the only stock feeling the pressure. The broader tech market has experienced a pullback in recent weeks as worries mount over the sustainability of AI capital expenditures at hyperscalers. Wall Street is also uncertain whether or not the Federal Reserve will cut interest rates at its meeting next month, and the decision carries implications for growth-oriented tech stocks sensitive to borrowing costs.

 

Klein also pointed to rising prices in the supply-constrained memory market as one of the reasons for concern. AMD's personal-computer segment has done well so far this year, Klein said, but that could be "at risk if memory prices choke off consumer demand" next year. The suggestion seems to be that PC makers might have to raise prices to offset their component costs, scaring away some buyers.

 

Read: The surprising stocks leading the tech sector this year thanks to an AI renaissance

 

Investors may also be worried about slowing usage and downloads of ChatGPT, Klein said. ChatGPT maker OpenAI announced a deal in October to deploy 6 gigawatts' worth of AMD's systems for the AI startup's AI infrastructure build out. The partnership is expected to start in the second-half of 2026 with the deployment of AMD's upcoming MI450 chips.

 

At the same time, OpenAI is facing increasing competition from Alphabet's (GOOGL) (GOOG) Google, which recently released its latest Gemini 3 AI model that it said outperformed ChatGPT 5.1 and Anthropic's Claude Sonnet 4.5 in certain tasks.

 

Alphabet shares were up 1% on Tuesday morning after The Information reported that Meta Platforms (META) is interested in using Google's tensor processing units in its data centers. Google has been using its TPUs for about a decade for its Search and YouTube algorithms, and has been training its Gemini models with the chips. But the prospect of more external interest for the chips, which are a rival offering to the graphics processing units made by AMD and Nvidia, seems to be spooking investors in those names.

 

Shares of Nvidia (NVDA) and AMD were down more than 6% and 9% on Tuesday morning, respectively.

 

Don't miss: Alphabet's stock rises as possible Meta chip deal highlights new twist in the AI trade

 

AMD said during its annual Advancing AI event in June that Meta uses its Instinct MI300X chips for its Llama 3 and Llama 4 models, and that the tech giant would be using its current MI350 series and following generations of AMD accelerators.

 

"If the AMD investor base is that scared and worried, the stock has problems" going into next year, Klein said in his Monday note.

 

Rasgon said in a Tuesday note that the report "feels incrementally negative" to AMD, considering its efforts to become a go-to source beyond Nvidia, and its partnership with OpenAI.

 

"In a world where Gemini hypothetically dominates over ChatGPT, and TPUs prove to be viable second sources for a broader swath of AI customers, will investors still be as eager to underwrite AMD's targets out to 2030?" Rasgon questioned.

 

Meanwhile, Wedbush analyst Dan Ives named AMD as one of his "top ten tech stocks to own in the AI revolution," in a Tuesday note. AMD is "set to gain market share in AI arms race," Ives said, adding that the stock has a "compelling valuation."

 

"We believe this is a 1996 moment...and NOT a 1999 bubble moment and remain firmly bullish on tech stocks into year-end and 2026 despite recent investor bearish fears," Ives said.

 

-Britney Nguyen

 

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11-25-25 1023ET

 
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