Shares of computer processor maker AMD plummeted 5.9% in morning trading after Goldman Sachs analyst Toshiya Hari downgraded the stock from Buy to Neutral, citing modest demand for its PCs, servers, and data center GPUs amid growing competition. The shares ended the day at $115.97, down 4.8% from the previous close.
The market’s reaction suggests that AMD’s business fundamentals haven’t changed, despite the downgrade. This presents an opportunity for investors to buy high-quality stocks at a discounted price. However, it’s essential to consider AMD’s volatile nature and its recent downward trend, which has resulted in a 45.1% decline from its 52-week high.
For long-term investors, AMD’s shares have increased by over 140% since $1,000 investment five years ago. While the company faces challenges in the GPU market, its growth potential is still significant. In fact, enterprise software stocks leveraging generative AI capabilities may be the future of technology, according to timeless principles outlined in “Gorilla Game: Picking Winners In High Technology.”
Source: https://finance.yahoo.com/news/why-amd-amd-shares-plunging-182102786.html