What's Going On With AMD Stock Tuesday?

Advanced Micro Devices, Inc AMD doled discounts to spur demand for its Ryzen desktop processors, leading to lackluster reviews.

The Nvidia Corp NVDA rival launched its Ryzen 9 9900X and 9950X in mid-August, offering improved versions of their predecessors with lower power consumption and competitive pricing, Forbes reports.

The new 9000-series CPUs with their Zen 5 architecture failed to impress with their gaming performance versus the 3D V-Cache titles, warranting a price cut.

The Ryzen 9 9900X has been retailing for 499 euros, as opposed to the 539 euros launch price, and the Ryzen 7 9700X at 379 euros against 399 euros in Germany from launch day, which is an unlikely phenomenon for new CPUs, as per the report.

AMD recently forged a deal to acquire artificial intelligence server builder ZT Systems for $4.9 billion, including an earnout of up to $400 million. The acquisition could become a significant driver of stock value, as quarterly results from server AI company Super Micro Computer, Inc. and Apple supplier Hon Hai Precision Industry Co. highlight the ongoing strong demand for AI servers.

The discounts will dampen AMD’s margins. JPMorgan analyst Harlan Sur expects AMD to grow data center GPU revenue by over $5 billion in fiscal 2024 through server and PC CPU market share wins.

AMD stock is up 49% in the last 12 months despite a broader semiconductor selloff. Investors can gain exposure to the stock through Invesco QQQ Trust, Series 1 QQQ, and Vanguard S&P 500 ETF VOO.

Price Action: AMD stock is up 1.6% at $157.88 at last check Tuesday.

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• AMD Bets Big On AI With $4.9B ZT Systems Deal: Goldman Sachs Highlights ‘1,000 Engineers’ Driving Competitive Edge

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