AMD experiences fall in the US stock market

Key points

• Seaport Research indicates a slowdown in AMD's artificial intelligence business (IA).
• New tariff threats on semiconductors arise
• A weak jobs report shows that the economy is slowing down

Shares of Advanced Micro Devices (NASDAQ: AMD) experienced a significant drop today in response to a downgrade by analysts, highlighting weaknesses in its artificial intelligence division (AI).

In addition, the market may have reacted negatively to an unfavorable employment report, as well as a new threat of tariffs on semiconductors. Reports also emerged that OpenAI plans to manufacture its own AI chips for the first time, which could threaten suppliers like AMD and Nvidia.

As a result, the shares fell by 6.3% by 11:28 a.m. ET.

Impact on AMD

The main reason for the massive sell-off was a downgrade from Seaport Research, which lowered its rating on AMD from buy to neutral, noting that checks in the supply chain indicated slower growth in its AI chip business.

Other reports seemed to heighten these concerns, as the August employment report showed that only 22,000 jobs were added last month, a sign of slowing economic growth.

Additionally, President Trump reiterated that his administration would impose tariffs on semiconductor imports for companies that do not move their production to the U.S. It is unclear whether this policy would affect AMD, which is headquartered in the U.S., but as a chip company without factories, it outsources production to foundries like TSMC. The uncertainty surrounding this measure could also be weighing on the stocks.

Competitors like Nvidia, the leading AI chip manufacturer, also fell today, although this could be in response to a Financial Times report indicating that OpenAI will begin production of its own AI chips for the first time, limiting its reliance on external partners like Nvidia and AMD.

Implications for AMD and the Technology Sector

The Seaport report on the slowdown in growth in the AI business is the most concerning news, as AMD has positioned itself as the second company in AI GPUs, although far behind Nvidia.

AMD reported strong sales of its AI accelerators Instinct Mi350 in the second quarter. Right now, the boom still looks healthy after Anthropic's valuation doubled to $183 billion earlier this week, but investors should be on the lookout for any other reports of weakness in AI at AMD.

This situation could have broader implications for the tech sector and the Web3 ecosystem. The slowdown in the AI chip market could affect the development of blockchain infrastructures and the performance of decentralized applications (DApps) that rely on advanced processing capabilities. Furthermore, changes in the semiconductor industry could influence the evolution of cryptocurrency trading platforms and the efficiency of blockchain networks.