AMD shares fall amid AI chip sector selloff

Advanced Micro Devices shares dropped 5.3% in morning trading on Thursday, falling to $523.57 from a prior close of $552.72 as AI chip stocks declined across the semiconductor sector.

The selloff followed a report from Seoul's Maeil Business Newspaper stating that Nvidia and Tesla plan to invest $2.8 billion in Samsung Electro-Mechanics to build chip substrate factories. The news raised concerns about circular financing, a practice where companies fund customers or partners that subsequently use those funds to purchase their products. While such arrangements can increase reported sales figures, they raise questions about whether underlying demand reflects customers spending their own capital.

Nvidia, Intel, and Advanced Micro Devices all fell in premarket trading on Thursday.

AMD's stock had been trading at roughly 199 times trailing earnings before the session, making it vulnerable to shifts in investor sentiment. Company insiders sold 231,100 shares worth approximately $114.9 million over the last 90 days.

Susquehanna raised its price target on AMD to $620 from $550 while maintaining a Positive rating in the prior session. Wedbush maintained an Outperform rating with a $600 target ahead of the company's third-quarter earnings report scheduled for November 3.

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