TLDR
- AMD stock fell nearly 3% in Monday premarket trading as rising Treasury yields and oil prices pressured tech and chip stocks.
- Brent crude jumped over 3% to $108 a barrel after Trump rejected Iran’s ceasefire conditions, adding inflation worries.
- The 10-year Treasury yield topped 5.2% and the 30-year hit 5.5%, both near multiyear highs.
- Despite the pullback, AMD is up about 30% over the past month on optimism around Meta’s Muse AI boosting CPU demand.
- BofA raised its AMD price target to $720 from $620, citing a server CPU market that could hit $211 billion by 2030.
AMD stock dropped nearly 3% in Monday premarket trading, trading around $613.64. The decline came as rising Treasury yields and higher oil prices weighed on tech stocks broadly.
Advanced Micro Devices, Inc., AMD
Intel fell even harder, down more than 6%, while AMD slid over 5% during the session. The Philadelphia Semiconductor Index dropped 3% as chip stocks bore the brunt of the selloff.
Brent crude climbed more than 3% to $108 a barrel. West Texas Intermediate gained 3.5% to $95.64 after President Trump rejected ceasefire conditions proposed by Iran.
Treasury yields extended last week’s climb too. The 10-year yield traded above 5.2%, while the 30-year topped 5.5%, both sitting near multiyear highs.
Higher oil prices tend to stoke inflation fears. That keeps pressure on interest rates, and rising yields hit growth stocks especially hard by increasing the discount rate applied to future earnings.
Why AMD Looked Stretched
AMD had run up sharply before Monday’s pullback. The stock trades 16.2% above its 20-day moving average and 68.2% above its 200-day moving average.
Its relative strength index sits at 73.24, above the 70 threshold that typically signals overbought conditions. That left the stock vulnerable to profit-taking once broader sentiment turned.
The pullback follows an intense rally driven by optimism around Meta’s Muse AI technology. AMD and Intel have each gained roughly 30% over the past month on that story.
The idea is that more capable AI agents doing independent tasks will need more computing power. That could expand the market for server CPUs made by AMD, Intel and Arm-based chipmakers.
Meta has said its own compute needs are “evolving to demand more CPU” as its agentic AI push continues. Michael O’Rourke, chief market strategist at JonesTrading, said the market has read Muse as a boost for an already tight CPU market.
That optimism helped AMD cross a $1 trillion market cap for the first time last week.
Analysts Raise Price Targets
BofA Securities lifted its AMD price target to $720 from $620 on September 25 while keeping a Buy rating. The firm expects the server CPU market to grow from $61 billion in 2026 to $211 billion by 2030, with $180 billion of that tied to AI.
BofA also pointed to the Anthropic-Akamai CPU infrastructure deal as more proof that CPUs matter more as AI systems get more agentic. Piper Sandler initiated coverage on September 10 with an Overweight rating and a $600 target. Raymond James upgraded AMD to Strong Buy on August 25, raising its target to $641.
AMD carries a Buy consensus rating with an average price target of $615.30. The stock trades at a price-to-earnings multiple near 161, a steep premium.
On Benzinga’s Edge Rankings, AMD scores 99.29 on Momentum, 95.62 on Quality and 95.6 on Growth. Its Value score is just 3.3.
AMD makes up 8.74% of the iShares Semiconductor ETF, 6.79% of the First Trust Nasdaq Semiconductor ETF and 6.52% of the Pacer Data and Digital Revolution ETF.
The rally also got a lift from Meta’s Connect event, where Meta unveiled Charm, a handheld device built for direct Muse access. Zuckerberg said Muse will soon reach Meta’s smart glasses lineup too, and Meta is expanding Muse through retail partners including Walmart, Best Buy, Sephora, Wayfair, Dick’s Sporting Goods and Gap.
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