Advanced Micro Devices (NASDAQ: AMD) stock declined 1.33% on Monday to close at $141.90, underperforming the broader market despite bullish signals from prominent investor Cathie Wood and positive earnings momentum.
Cathie Wood doubles down on AMD
Cathie Wood’s ARK Invest snapped up over 356,000 shares of AMD across three of its ETFs on Monday, totaling $51.24 million in new investment. With AMD now the 11th-largest holding across ARK ETFs, the move signals growing confidence in the chipmaker’s AI roadmap and market position.
ARK’s aggressive buy comes after a similar purchase of 130,000+ shares last week, showing continued conviction in AMD’s long-term value—even as short-term volatility rises.
Ryzen leaks raise competitive concerns
Monday’s decline also followed new leaks about AMD’s upcoming Zen 6 Ryzen processor, which reportedly includes 24 cores—well below Intel’s rumored 52-core chip. While AMD’s next-gen chip could feature boost clocks over 7GHz, some analysts believe the lower core count might hinder competitiveness in the workstation and data center space.
Still, AMD’s chips remain highly favored in the gaming ecosystem, with Zen 2 powering devices like the Steam Deck and upcoming consoles from Microsoft and Sony.
Earnings outlook: Mixed but improving
Looking ahead, analysts project AMD will report $0.54 in Q2 EPS, down 21.7% year-over-year. However, revenue is expected to rise 27% to $7.41 billion, reflecting strong AI chip sales and data center demand.
For the full fiscal year, AMD is projected to earn $3.92 per share on $31.76 billion in revenue, representing YoY growth of +18.4% and +23.2%, respectively.
The stock currently trades at a Forward P/E of 36.7, a premium to its industry average, and sports a PEG ratio of 1.5, suggesting a fair valuation relative to expected growth.
Analyst sentiment and valuation
Wall Street analysts maintain a Moderate Buy rating on AMD. Out of 34 analysts tracked by TipRanks, 24 rate it a Buy and 10 a Hold. The average price target is $133.55, indicating a potential 6% downside from current levels—reflecting near-term valuation concerns despite strong fundamentals.
AMD’s performance has been impressive:
- +29.9% over the past month
- +17.5% year-to-date
- Still down 8.8% over the past year
Bottom line: Long-term bullishness amid short-term noise
Between Cathie Wood’s vote of confidence, strong year-to-date gains, and expanding AI chip potential, AMD remains a stock to watch. While Ryzen leaks and earnings uncertainty may shake short-term traders, long-term investors appear undeterred by Monday’s pullback.
More AMD Coverage
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