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Images of AMD | AMD Shares Slide Amid AI Disruption and Market Concerns | Image Credit: Trusted Reviews

AMD shares fell 6.9% Monday, to $115.01, and one of the reasons cited was the AI competitive pressures on the company. This was part of a broader sell-off in markets, as the S&P 500 and Nasdaq Composite fell 1.7% and 3.3%, respectively.

The sharp sell-off came on news of a breakthrough by a Chinese company, DeepSeek, that revealed an artificial intelligence model as good as, if not better than, leading players in the U.S. – OpenAI and Amazon. This was said to be more efficient and cheaper compared to DeepSeek’s model, causing fear that demand for high-end AI chips area where AMD has seen growing interest decline as cloud providers re-evaluate their hardware needs.

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Although this is still a developing trend, analysts advise against overreaction to this news. DeepSeek’s innovation could speed up the coming adoption of edge AI, an area where AMD competes well against rivals with its flexible chips. This trend could position AMD for a higher market share than dominant rival Nvidia, particularly as the competition has related edge computing applications.

AMD reported strong growth in its most recent earnings report out of its data center division, where revenue grew by 122% from the same period last year. It additionally sees continued strength ahead and is guiding for $7.5 billion in revenue for Q4 as it rolls out new products and sees improving market conditions in its gaming and embedded business lines.

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The future is still positive even though the immediate future for AMD’s stock is uncertain. Potential future gains could come from their strong balance sheet, innovative product pipeline, and emerging AI markets. Analysts believe current valuations represent an attractive entry point for investors seeking opportunities in the semiconductor space.

AMD stands well-positioned to be an attractive bet in future bets on AI and data center growth.

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By Haider Shah

Haider Shah is a highly experienced content writer with 6 years of experience, covering business, finance, and tech-related news. He can produce factual, well-researched articles suitable for professional readers.

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