AMD Stock Tumbles 8% as Intel's Grim PC Warning Rattles Investors Days Before Its Own Earnings Report

Advanced Micro Devices shares fell more than 8% on Friday, caught in a semiconductor selloff triggered by rival Intel's weak forecast and a warning that the personal computer market will shrink sharply over the next two years.

AMD traded at $519.25 shortly before 10:45 a.m. EDT, down $47.17, or 8.3%. The stock fell as much as 10.1% to $509.19 earlier in the session.

The decline came just days before AMD reports third-quarter results on Nov. 3, raising the stakes for a stock that had already climbed sharply this year.

Intel's warning spills over

AMD is Intel's main competitor in x86 processors, the chips that power most PCs and many servers. That means Intel's gloomy view of the PC market lands directly on AMD.

Intel forecast fourth-quarter revenue of $15 billion to $16 billion, below the $17.1 billion analysts expected. It said revenue from PC chips would fall more than 20% from the prior quarter.

Intel also warned that PC weakness could last through at least the first half of 2027. It blamed higher memory prices, which have raised computer costs and cut demand.

Intel now projects the PC market will contract 12% in 2026 and 10% in 2027. Intel shares fell more than 27% Friday.

Competition questions in data centers

The fallout was not limited to PCs. Intel reported 78% growth in data center and AI revenue, driven by strong demand for its Xeon server processors. That raised questions about competitive pressure on AMD's EPYC server chips, a key growth driver for the company.

Analysts said the PC demand concerns escalated ahead of AMD's report.

AI spending jitters

AMD was also hit by a broader retreat from AI-linked stocks. Nasdaq futures fell more than 2% before the opening bell after Amazon's plans for continued heavy AI spending and Intel's cash burn warning deepened worries about the cost of building AI infrastructure and when it will pay off.

Amazon reported a free cash outflow of $42.4 billion over the 12 months ending Sept. 30, compared with an inflow a year earlier, and kept its forecast for about $220 billion in 2026 capital spending.

Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, said "the risk is that higher financing costs will absorb more of the cash generated."

Several tech companies have borrowed in the bond market to fund AI investment, fueling concern that higher borrowing costs could make that spending harder to justify.

Valuation and dilution concerns

Some investors were also focused on valuation. AMD closed Thursday at $566.42, and its 52-week range spans from $188.22 to $658.52.

TradingKey reported that an all-stock deal to acquire World Labs, valued at about $8.2 billion and disclosed in a regulatory filing, could dilute shareholders in the near term, leaving the stock vulnerable if results disappoint.

GuruFocus data show company insiders sold roughly $114.9 million in AMD shares over the past three months.

Strong AI story remains

Despite Friday's drop, AMD's AI business remains a central part of the investment case. The company has major AI growth drivers through partnerships with Meta and Anthropic, though supply constraints, customer concentration and high expectations raise the bar for the coming report.

Unlike Intel, AMD does not own factories. It designs chips and outsources production, which can leave it less exposed to the heavy fixed costs that hurt Intel's margins during downturns.

Market backdrop

The broader market was under pressure Friday. The S&P 500 fell 1.1% and the Nasdaq composite dropped 2.2% shortly after the open.

The iShares Semiconductor ETF dropped about 7% in premarket trading, a much steeper slide than the 2% decline in the Invesco QQQ Trust, which tracks the Nasdaq 100.

What investors will watch

When AMD reports on Nov. 3, investors will look for signs of how badly the PC slowdown affects its client chip business, how its server chips are holding up against Intel's resurgent Xeon line, and whether demand for its AI accelerators can offset weakness elsewhere.

The company's guidance for the fourth quarter will be closely watched after Intel's outlook reset expectations across the sector.