Advanced Micro Devices (AMD +1.74%) stock fell 8.1% on Thursday, Oct. 22, as oil prices jumped amid renewed conflict in the Middle East.
The S&P 500 and the Nasdaq Composite lost 1.2% and 2.6%, respectively.
AMD Advanced Micro Devices
NASDAQ · As of 4:00 PM ET 10/23/26
Oil adds pressure to an expensive build-out
Renewed attacks in Saudi Arabia from Houthi rebels raised fears of further disruptions to oil supplies.
Image source: Getty Images.
Brent Crude, an international benchmark for oil prices, topped $112 a barrel on Thursday, the highest level since May of this year. High energy prices threaten to drive already elevated inflation even higher, and that makes the outlook for borrowing costs more complicated.
The AI infrastructure build-out is incredibly expensive and is more and more fueled by debt as the big tech sees its cash flows diminish. Meta Platforms' Q3 report showed aggressive capital spending continuing, leading to a negative free cash flow (FCF) for the first time since 2012. So while there is no sign of spending slowing down today, the concern is whether the current pace is sustainable if borrowing costs continue to rise and how that will impact AMD's bottom line.
There was another factor at play from Meta's earnings: the company approved a new non-voting share class explicitly to be used to raise capital without diluting CEO Mark Zuckerberg's voting power.
