Why AMD Stock Just Crashed

Core Insights - The AI market is experiencing a shift, causing concern among Advanced Micro Devices (AMD) investors [1] - Meta is reportedly planning to purchase Tensor Processing Units (TPUs) from Alphabet, which negatively impacts Nvidia and likely AMD as well [2] - The transition from Nvidia to Alphabet's chips could lower costs for Meta, while Alphabet stands to gain financially [4] AMD's Position - AMD's stock has declined by 7.9% following the news of Meta's potential switch to Alphabet's TPUs [2] - The expectation that Meta would purchase AMD GPUs has diminished, leading to speculation that AMD stock may be a sell [5] - AMD's market cap is $350 billion with trailing profits of $3.3 billion, resulting in a price-to-earnings ratio exceeding 100, raising concerns about its valuation [5] Market Dynamics - Nvidia is positioned as the primary loser in this scenario, losing sales to Alphabet, while AMD is also likely to suffer [4] - The shift in Meta's purchasing strategy indicates a competitive landscape in the AI chip market, affecting both AMD and Nvidia [6][7]