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The AMD stock price has collapsed in the past few months as the semiconductor company goes through a substantial slowdown. It has retreated to a low of $104.75, its lowest level since November 1, and 55% below the highest point in 2024. This crash has pushed its market cap from $342 billion to $170 billion, leading to a $172 billion wipeout.

AMD stock crashes as growth concerns remain

AMD, the giant semiconductor company, is under pressure as concerns emerge that the artificial intelligence (AI) industry was slowing. 

These concerns rose on Wednesday when NVIDIA (NVDA), its biggest competitor, published its financial results. Its numbers showed that its revenue growth accelerated in the fourth quarter, reaching $39.3 billion. That brought its total annual revenue to over $130 billion. 

The concern, however, is that its guidance was relatively weaker than expected. It expects that its quarterly revenue will be $43 billion in the first quarter, lower than what some analysts were expecting. 

The most recent financial results showed that AMD’s business did well in the last quarter. Its revenue rose by 24% to $7.65 billion in the third quarter to $7.6 billion, while its gross profit soared by 33% to $3.8 billion.

Most of this revenue growth came from its data center business whose revenue jumped by 69% to $3.8 billion. The client division revenue rose by 58% to $2.3 billion.

However, the other key parts of AMD’s business remained under pressure. For example, the gaming segment made $563 million, down by about 59% from the same period a year earlier. The embedded revenue dropped by 13% to $923 million.

AMD is gaining AI market share

What is clear is that AMD is now gaining market share against NVIDIA  in the data center division, a trend that may continue as more companies move to its chips. AMD’s GPUs are often of higher quality and cost much less.

The main concern is whether the sector will continue seeing strong growth in the coming years now that AI spending may start slowing.

Many large companies have insisted that their spending will continue. For example, Amazon has pledged to spend over $100 billion in AI capital spending this year. The big four spenders will spend over $300 billion in that period, a move that will benefit vendors like AMD and NVIDIA. 

The AI industry has also been disrupted by DeepSeek, a Chinese company that has demonstrated that one can build advanced AI models using affordable and less advanced chips. 

Analysts expect that AMD’s business will maintain its steady growth this year. The estimate is that the revenue will grow by almost 30% in the first quarter, bringing the annual growth rate to 23.4% to $31.8 billion. It will then make over $38 billion in the next financial year.

AMD stock price analysis

 

(Click on image to enlarge)

The daily chart shows that the AMD share price has been in a strong downward trend in the past few months, as we predicted. It has remained below the 50-day and 200-day moving averages, leading to a death cross formation in November last year. 

The MACD indicator has moved below the zero line, while the Relative Strength Index (RSI) has formed a symmetrical triangle pattern. This triangle is nearing the confluence level.

On the positive side, the AMD stock price has formed a falling wedge chart pattern, a popular bullish reversal sign. Therefore, this pattern points to a strong rebound in the coming months to $174.12, up by 67% from the current level.

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