Key Takeaways
- AMD fell 13% today, with Intel and Bloom Energy also lower, on fears that Democrats’ midterm sweep will slow the AI data-center build-out.
- AMD had no news of its own, two days after a strong quarter and a forecast for 80%-plus revenue growth in 2027.
- Rising memory costs threaten PC chips, though AMD has less PC exposure than Intel.
- Analysts expect AMD’s earnings to more than double in 2027, and the sell-off pulls its forward P/E toward its five-year average.
Advanced Micro Devices (AMD) fell 13% today as Democrats’ midterm sweep hit chip stocks for a second day. Intel (INTC) fell 9%, and data-center power supplier Bloom Energy (BE) dropped 18%.
Tech analyst Dan Ives called the result a “seismic shift that will have a negative impact on the pace of the AI Revolution buildout in the US.”
AMD’s own news was great
AMD’s Data Center sales jumped 97% to $8.5 billion, and CEO Lisa Su now expects 2027 revenue to grow more than 80%.
Analysts already had AMD’s normalized EPS more than doubling, from $7.62 this year to $16.01 in 2027:
Analysts expected about 75% revenue growth in 2027 going into the report, so I’d expect those estimates to rise.
TIKR tracks 53 analysts on AMD. How many say “Buy”?
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The worries came from elsewhere
Overnight, Qualcomm warned of rising memory costs, and Micron paused a $4.5 billion Taiwan plant, Bloomberg reported.
Memory is a real risk for AMD’s PC chips: Morningstar’s Brian Colello wrote that “High memory chip prices may stunt PC production and demand for AMD’s PC CPUs in 2027,” but noted AMD has less PC exposure than Intel.
Intel’s third-quarter client computing revenue fell 5% to $8.1 billion, and CFO David Zinsner sees “the PC slowdown continuing at least through the first half of next year.” Its late-January report will show us how much worse it gets.
Bloom fell despite good news: NTT DATA agreed to deploy 900 megawatts of its fuel cells at data centers from 2027. If Ives is right, the risk is slower US orders.
Applied Materials (AMAT) fell 8%. A paused fab like Micron’s doesn’t need its tools yet, and Applied’s Nov. 12 report will show us whether chipmakers are pulling back.
AMD just got cheaper
AMD traded at 42x forward earnings as of Monday, above its five-year average of 35x but far below June’s 67x peak:
Today’s drop pulls it closer to that average.
With earnings expected to more than double next year, I’d use this drop to buy.
Of course, AMD’s 2027 depends on customers getting their data centers online on time, and the fourth-quarter report in early February is the next test.
So what is AMD stock actually worth?
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