Advanced Micro Devices (AMD) Stock Experiences Pullback Amid Broader Market Pressures

Advanced Micro Devices Inc. (NASDAQ: AMD) shares fell sharply in late February trading, dipping below $203 amid broader semiconductor sector volatility and investor digestion of recent gains tied to artificial intelligence demand.

As of midday Feb. 26, 2026, AMD stock traded around $202.50, down approximately 4% from the previous close of $210.86. The decline placed the shares well off the 52-week high of $267.08 reached in late 2025, though still significantly above the 52-week low of $76.48. Trading volume exceeded 20 million shares in early sessions, reflecting heightened investor interest.

The pullback comes despite positive developments in AMD’s AI chip business. On Feb. 24, the company announced a major multi-year deal to supply up to $60 billion worth of artificial intelligence accelerators to Meta Platforms Inc. over five years. The agreement allows Meta to acquire as much as 10% of AMD’s equity under certain conditions. News of the partnership initially propelled shares higher, with gains of more than 8% in one session to around $213.84.

Analysts viewed the Meta deal as a validation of AMD’s growing presence in the data center AI market, where it competes directly with Nvidia Corp. The transaction follows AMD’s push into high-performance computing with its Instinct series GPUs and EPYC processors.

“AMD is accelerating adoption of its high-performance EPYC and Ryzen CPUs while rapidly scaling its data center AI franchise,” AMD Chair and CEO Lisa Su said in recent statements highlighting momentum entering 2026.

The company’s latest financial results, reported Feb. 3, underscored robust growth. For the fourth quarter of 2025, AMD posted record revenue of $10.3 billion, up 34% year-over-year. Gross margin reached 54% (57% non-GAAP), operating income hit $1.8 billion ($2.9 billion non-GAAP), and net income stood at $1.5 billion ($2.5 billion non-GAAP). Diluted earnings per share were $0.92 ($1.53 non-GAAP), surpassing analyst expectations.

Full-year 2025 results showed record revenue of $34.6 billion, with non-GAAP operating income of $7.8 billion and diluted EPS of $4.17. The data center segment, fueled by AI demand, drove much of the performance.

Management expressed optimism for 2026, forecasting significant top- and bottom-line growth. Executives projected a 60% compound annual growth rate in data center revenue over the coming years, supported by hyperscaler spending. Major cloud providers, including Meta, Amazon and Alphabet, plan hundreds of billions in capital expenditures for AI infrastructure in 2026, creating opportunities for AMD’s offerings.

Despite these tailwinds, shares have retreated about 18% in the past month. Some investors appeared to take profits after the post-earnings surge and subsequent deal announcement. Broader market concerns, including interest rate uncertainty and competition in AI chips, contributed to the pressure.

Analysts remain largely bullish. Consensus price targets hover around $285 to $286, implying substantial upside from current levels. Bank of America recently adjusted its target following the Meta news, while other firms highlighted AMD’s competitive positioning against Nvidia in cost-effective AI solutions.

The company continues innovating in AI hardware. Partnerships, such as the Helios rack-scale system developed with Meta through the Open Compute Project, position AMD to challenge Nvidia’s dominance in data center deployments. Initial shipments of advanced systems are expected later in 2026.

AMD’s broader portfolio includes Ryzen processors for consumer and enterprise markets, where demand remains steady. The company benefits from trends in personal computing, gaming and embedded systems.

Investors monitor upcoming catalysts, including progress on the Meta deal, new product launches and quarterly guidance. With AI infrastructure spending projected to rise sharply, AMD appears well-placed for multi-year expansion, though near-term volatility persists in a competitive landscape.

Market capitalization stands at approximately $330 billion to $344 billion, depending on intraday fluctuations. The price-to-earnings ratio remains elevated, reflecting growth expectations in the AI era.

As the semiconductor industry navigates rapid technological shifts, AMD’s trajectory hinges on execution in capturing AI market share while maintaining profitability. The recent stock dip may represent a buying opportunity for long-term investors betting on sustained data center growth.