Why Is AMD Stock Falling Monday?

Advanced Micro Devices Inc. (NASDAQ:AMD) stock fell nearly 6% in Monday’s premarket session as a selloff in AI-linked stocks deepened. Nasdaq futures are down 1.51% while S&P 500 futures have shed 0.65%.

Peers Intel Corp. (NASDAQ:INTC), NVIDIA Corp. (NASDAQ:NVDA) and Broadcom Inc. (NASDAQ:AVGO) also fell between 3% and 6%.

AI Safety Debate Raises Spending Concerns

The selloff came as investors reassessed the outlook for AI infrastructure spending amid growing debate over the pace of AI development.

The Financial Times reported that calls to slow AI development over safety concerns could eventually translate into lower infrastructure and capital spending. Semiconductor and memory stocks were among the hardest hit.

The debate intensified after Anthropic CEO Dario Amodei called for leading AI companies to work together on managing AI development and safety. OpenAI CEO Sam Altman and SpaceX CEO Elon Musk supported the effort, according to the Financial Times.

Barclays strategist Emmanuel Cau said a greater focus on AI safety could raise questions about the pace of capital spending. Investors are also weighing what slower investment could mean for global growth and corporate earnings.

AI Spending Concerns Pressure AMD

The broader risk-off mood added pressure on AMD after a strong run. The stock has gained more than 220% over the past 12 months.

That rally has left AMD well above its longer-term trend. As a result, weaker market sentiment could make the stock more sensitive to profit-taking.

Technical Analysis

At $490, AMD trades 1.4% above its 20-day simple moving average of $482.03. However, it remains 1.6% below its 50-day SMA of $496.55.

The stock is still 40.9% above its 200-day SMA of $346.91, keeping the longer-term trend bullish.

However, the 20-day SMA remains below the 50-day SMA. That signals continued near-term weakness. AMD could face resistance near the 50-day average until it can hold above that level.

Meanwhile, the MACD remains above its signal line with a positive histogram. That suggests bearish momentum has eased.

Traders will likely watch $491 as an immediate pivot. A sustained move above that level could help stabilize the stock. If selling continues, $463 is the next key support area.

Analyst Outlook

AMD carries a Buy consensus rating with an average price forecast of $604.66.

Piper Sandler initiated coverage with an Overweight rating and $600 price forecast on Sept. 10. Raymond James upgraded AMD to Strong Buy and raised its forecast to $641 on Aug. 25. BMO Capital Markets initiated coverage with an Outperform rating and $550 forecast on Aug. 21.

The stock trades at a price-to-earnings ratio of about 131.7, reflecting a premium valuation.

Benzinga Edge Rankings

Benzinga Edge gives AMD strong Momentum, Quality and Growth scores.

Momentum stands at 98.92, while Quality scores 94.09 and Growth comes in at 95.58. However, AMD’s Value score is just 4.06.

The readings point to a high-growth stock with strong momentum and business quality but a demanding valuation. That combination can amplify moves when investors rotate away from premium-priced technology stocks.

Top ETF Exposure

AMD also carries significant weight in several exchange-traded funds. It accounts for 8.10% of the iShares Semiconductor ETF (NASDAQ:SOXX), 5.86% of the ARK Autonomous Technology & Robotics ETF (BATS:ARKQ) and 7% of the ARK Next Generation Internet ETF (NYSE:ARKW).

Large inflows or outflows from these funds can add to buying or selling pressure on AMD shares.

AMD Price Action

Advanced Micro Devices shares fell 5.06% to $490 in Monday’s premarket trading, according to Benzinga Pro data.

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