AMD Beat Estimates, Yet the Stock Slipped: Here's What Wall Street Is Really Worried About

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Devices ›There is no doubt that semiconductor stocks have been some of the most direct beneficiaries of the artificial intelligence (AI) revolution. While Nvidia has claimed the top spot in the chip realm, peers such as Broadcom and Taiwan Semiconductor Manufacturing have also earned positions in the trillion-dollar club thanks to AI-driven tailwinds.In the background, Advanced Micro Devices (NASDAQ: AMD) has also put on an impressive performance despite being largely overshadowed by its chief rival, Nvidia. In early November, AMD reported financial and operating results for the third quarter. Overall, the report was solid; and yet, Wall Street still found some reasons to sell the stock.Let's break down what's been causing AMD stock to sell off post earnings and assess whether now is an opportunity to buy the dip.Since the company reported earnings on Nov. 4, its shares have retreated by about 7.5% as of this writing (Nov. 18). I believe a number of factors influenced the sell-off:Macro uncertainty: At the time of AMD's third-quarter earnings, the U.S. government was still in the midst of a shutdown that had no end in sight. Political friction isn't necessarily anything new, but given how long this specific shutdown had already lasted -- coinciding with earnings season -- made it challenging for Wall Street to look beyond the gridlock in Washington. In essence, investors had to assess the shutdown's impact on the economy -- creating a sense of prolonged uncertainty and ultimately outweighing a strong report.China's AI market: Nvidia CEO Jensen Huang estimates that the addressable market for AI in China is $50 billion annually. This would appear to be a great opportunity for designers of graphics processing units (GPUs), but one of the biggest headwinds for both Nvidia and AMD is selling their chips in China. A combination of national security concerns and trade negotiations tied to the new tariff policies has made it more challenging to penetrate the China market. Against this backdrop, AMD's quarterly operating results exhibit some notable ebbs and flows.Potential hiccups in the supply chain: AMD relies heavily on Taiwan Semiconductor to manufacture its GPUs. Given the ongoing tensions between Taiwan and China, some investors are naturally wary that the company's supply chain could become compromised should geopolitical pressures continue.Momentum like there's no tomorrow: Despite the recent sell-off, the stock has still gained 91% in 2025. 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