Why AMD Stock Tumbled Today

Key Points

• Intel and Nvidia are tying up -- and that's bad news for AMD.

• AMD stock costs a pricey 95x earnings, and faces tougher competition in the artificial intelligence (AI) space going forward.

• 10 stocks we like better than Advanced Micro Devices ›

Intel (NASDAQ: INTC) stock soared more than 25% in early trading Thursday, and Nvidia (NASDAQ: NVDA) stock is at least up a couple of percentages, but what about the third giant of the semiconductor manufacturing world, Advanced Micro Devices (NASDAQ: AMD)?

AMD, it turns out, is down 3% through 10:55 a.m. ET.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Image source: Getty Images.

Intel + Nvidia = bad news for AMD

In case you haven't heard the news, here's a quick rundown. This morning, Nvidia announced it will buy $5 billion worth of Intel stock at $23.28 per share. (That's a 6.5% discount to Intel's closing share price Wednesday, a sweet deal on Intel stock for Nvidia). The two chips giants will also team up to build new "custom data center and PC products" together.

"Seamlessly connecting Nvidia and Intel architectures using Nvidia NVLink," Nvidia will add its own artificial intelligence (AI) to Intel's leading position in chips for PCs to dominate the market for PCs using AI.

Is AMD stock a sell?

Now, if all of this sounds to you like bad news for AMD, I agree. Two of the company's biggest rivals -- in AI, in PCs, in everything high-tech, basically -- can now team up to squash AMD like a software bug. Granted, I personally can't imagine antimonopoly regulators agreeing to let anything like this happen, and I'd expect court challenges to arise.

If they don't, however, and this partnership is allowed to proceed, I foresee trouble ahead for AMD.

Now, factor in the fact that AMD stock costs an incredible 95 times earnings already -- a premium valuation that's probably no longer justified in light of its diminished prospects -- and now might be a good time to sell your AMD stock.

Should you invest $1,000 in Advanced Micro Devices right now?

Before you buy stock in Advanced Micro Devices, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Advanced Micro Devices wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $662,520!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,043,346!*

Now, it’s worth noting Stock Advisor’s total average return is 1,059% — a market-crushing outperformance compared to 189% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of September 15, 2025

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, and Nvidia. The Motley Fool recommends the following options: short November 2025 $21 puts on Intel. The Motley Fool has a disclosure policy.