What Happened?
Shares of computer processor maker AMD (NASDAQ: AMD) fell 3.3% in the afternoon session after Microsoft unveiled its latest AI chip to reduce reliance on established chipmakers.
Microsoft announced its Maia 200 chip, an AI accelerator built on an advanced process, intended to serve multiple AI models, including new ones from OpenAI. This development signaled a move by a major tech company to bring its chip design in-house, potentially shrinking the market for third-party suppliers and increasing competitive pressure.
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What Is The Market Telling Us
AMD’s shares are extremely volatile and have had 31 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 6.2% on the news that it received a series of positive developments, including upbeat analyst commentary, a new board appointment, and bullish sentiment on artificial intelligence spending.
KeyBanc reiterated its "Overweight" rating and $270 price target, pointing to strong server CPU demand. The firm noted that hyperscalers were already securing 2026 capacity, with AMD nearly sold out of server CPUs through the end of that year.
Adding to the optimism, Bernstein raised its price target on the stock from $200 to $225. The positive mood was also bolstered by comments from Nvidia's CEO at the World Economic Forum, who outlined a vision for trillions of dollars in new AI infrastructure spending. Separately, AMD announced the appointment of KC McClure, former Chief Financial Officer of Accenture, to its board of directors.
AMD is up 12.2% since the beginning of the year, and at $250.81 per share, it is trading close to its 52-week high of $264.33 from October 2025. Investors who bought $1,000 worth of AMD’s shares 5 years ago would now be looking at an investment worth $2,648.
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