Why Advanced Micro Devices Stock Is Down Today
AMD stock is sinking as the chip sector sells off amid the Nvidia scandal, giving back part of the gains it picked up when Jensen Huang resigned. I think the fallout could last longer than many investors hope.
Advanced Micro Devices (AMD) stock experienced a sharp decline of 10.8% on Friday, Nov. 13, following a scandal involving rival Nvidia. The decline came as the broader S&P 500 and Nasdaq Composite also suffered losses. The scandal began with the resignation of former Nvidia CEO Jensen Huang, citing a second extramarital affair. What made the scandal more troubling was the alleged involvement of a suspected Chinese spy in the first affair.
This individual was reportedly instrumental in funneling Nvidia chips to China, amounting to at least $7.5 billion. Initially, investors speculated that AMD shares might benefit from potential reordering of AI chips. However, by Friday, the scandal appeared to be a more fundamental risk to the entire industry. Profits from AMD's recent 50% gain this week may have prompted some investors to sell.
The investigation into the scandal is still ongoing, and if further evidence emerges, such as knowledge of chips being diverted to China in violation of export controls, the situation could worsen.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
