AMD shares rebounded after a Thursday sell-off that followed a record quarterly report. The Motley Fool suggests the move reflects a delayed reaction to earnings, and says investors may have to worry about valuation.
Advanced Micro Devices closed at $449.04, up 11.04%, as pre-market buying followed Thursday's drop. Trading volume reached 45.2M shares, about 101% above its three-month average of 22.4M shares.
Chip buyers return after Thursday's sell-off
AMD seems to be benefiting from a delayed reaction to its third-quarter 2026 earnings report, which came out on Nov. 4. Investors sold off the stock on Thursday amid concerns that the midterm election results would empower politicians to regulate the industry more tightly.
Peers rose too. Nvidia closed at $186.64, up 2.78%, and Intel closed at $56.28, up 7.71%, as chip buyers returned and AI demand stayed in focus.
Record revenue and a 45% annual increase
AMD reported record revenues on Wednesday. The $13.4 billion in revenue was a 45% year-over-year increase, with data center revenue rising by 97% over the same period.
Looking ahead, analysts predict 50% revenue growth for the year, followed by an additional 79% in 2027.
Valuation is the concern
However, the source flags valuation as the area where investors may have to worry. The 98 P/E ratio is well above that of AMD's peers, according to The Motley Fool, and the stock may leave investors wondering whether it is a buy at that premium.
Source: The Motley Fool
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