AMD Stock Implosion

[Freddie Sotelo]

What's happening with AMD? I see that their stock price dropped a lot on Tuesday. Can someone explain why this happened? I see that it was due to implosion but don't know what that means. I'm interested in knowing. I expected them to be better after the Ryzen 5 release. I probably put this in the wrong category but whatever.

 

[Jwpanz]

The stock market is a weird place to imagine. There's a lot that goes into it. For the recent AMD drop, the odds are that a lot of investors (or a few with a ton of stock) sold their shares because the share price had quadrupled over the past year. So, they invested about $5 per share and then a year later the share price was over $15. If you invested $10,000 dollars a year ago you would have over $30,000 now. With the success of Ryzen driving the stock price up, investors saw a looming competition on the horizon and feared another drop in stock. So, they sold while the shares were peaked. This makes the stock price fall.

 

[0ldsch00l]

Not a fan of capitalism but this was predicted before Ryzens realease, suprisingly not even 50% of advisors recommened AMD stock despite Ryzen potential. SImply due to intels megamonopoly and knowing most people think intel good amd crap.

 

[calmstateofmind]

I told my grandfather to invest in AMD a few years back when they were at $1.9/share. A month or two ago they were at $15/share.. Why did he not listen to me?!?!

To answer your question though, there is no good answer for this. It's difficult to pinpoint the behavior of a stock to a single event, unless it's something so absolutely obvious, but in this case, AMD's stock behavior is most likely due to various analysts undervaluing the stock, and shareholders acting off of those assessments.

There doesn't seem to be anything so apparent as to why this drop occurred, other than people don't see the stock value getting much higher before it gets much lower. IMO, AMD stock will hold under $15/share for a long time to come, and those who sold were smart in doing so (assuming they got in at a profitable time).

Cheers.