Nasdaq’s continued tumble is pulling other widely-held favorites. Advanced Micro Devices (AMD) joined the stocks stuck in a downtrend. Despite posting strong quarterly results, the stock is correcting to the downside.
AMD has a price-to-earnings ratio of only 28 times. Patient investors may wait for the growing technology sell-off panic before starting a position in this semiconductor stock.
AMD will buy Xilinx for $35 billion. Xilinx makes programmable logic devices. In 2015, Intel acquired Altera, also a PLD manufacturer. This will put AMD into further competition with Intel.
AMD is dominating over Intel on premium PC CPUs. Still, its Ryzen chips are in short supply, pressuring customers to consider the budget or mainstream chips. Intel’s Alder Lake corrected its disastrous 10xxx-series CPU released in early 2021. It could increase its pressure on AMD by entering a price war.
Already, Intel cut prices on its CPUs, including the inexpensive i5 series. AMD will not have a refreshed Zen chip until later this year.
In the graphics card market, Intel will release its first products this quarter. AMD addressed the overpriced GPU by releasing a weak 6500XT card. The card already retails for almost double the price. This is infuriating gamers who still must overpay for a GPU that is worse than those released six years ago.
The downside in AMD stock is at the market’s mercy. Watch for Nasdaq volatility falling first before buying AMD.
