Advanced Micro Devices (AMD +1.70%) stock has headed lower in Tuesday's trading, but it's also regained some ground from sell-offs at the beginning of the session. The semiconductor company's share price was down 1.5% as of 3 p.m. ET in the context of flat trading for the S&P 500 index and a 0.3% decline for the Nasdaq Composite index. The stock had been off as much as 4.9% near the start of trading.
After hitting a record high in yesterday's trading, the Nasdaq Composite is seeing a modest pullback today. Sell-offs for chip stocks including AMD played a big role in pushing the index significantly lower early in trading, but there has been a valuation recovery trend as the day has progressed.
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AMD stock slips as tech rally takes a breather
Tech sector valuations have generally been red-hot lately. Encouraging corporate earnings reports and industry performance tracking and expectations that the Federal Reserve will now issue multiple cuts to the benchmark interest rate have helped bolster share prices, but valuations for AMD and many other chip stocks are taking a modest step back today.
NASDAQ: AMD
Key Data Points
In addition to profit taking on the heels of the Nasdaq Composite hitting a record high in Monday's session, a report from The Wall Street Journal on the Stargate artificial intelligence (AI) initiative appears to be a factor in the sell-off. Stargate is a $500 billion AI investment collaboration between Softbank, OpenAI, Oracle, and MGX aimed at strengthening U.S. artificial intelligence infrastructure, but it's reportedly run into some early road blocks -- and near-term expansion plans are said to have been pared back.
What's next for AMD?
Renewed excitement surrounding the company's opportunities in the AI space has helped power a strong rally for AMD stock recently, and the company's share price is up roughly 81% over the last three months even with today's pullback. Investors won't have to wait long to get a closer look at the company's progress in the AI data center space.
AMD is scheduled to report its second-quarter earnings after the market closes on Aug. 5. Performance expectations have been elevated following the company's valuation run-up, but the launch of the company's MI350 processor and some encouraging information shared at its Advancing AI conference last month suggest the company could have some good news to share in the report.
