AMD shares fall 7% as Meta AI capacity concerns rise

Shares of Advanced Micro Devices declined sharply this week, falling roughly 7% on July 1, as investor sentiment cooled following reports that Meta Platforms might sell excess AI computing capacity. The stock's retreat marked a pause in a remarkable rally that had seen AMD shares surge more than 150% year-to-date prior to the pullback.

The immediate catalyst was market concern that if Meta monetizes surplus AI computing power, it could signal reduced demand for future chip orders. Despite this near-term pressure, several major financial institutions reaffirmed their bullish outlooks on the semiconductor company. Analysts at Wells Fargo raised their price target to $615 from $505, citing strong demand for AMD's EPYC server processors from hyperscale cloud providers. UBS lifted its target to $670 from $455, anticipating that emerging agentic AI applications will drive further server CPU demand. Cantor Fitzgerald set the highest target among major firms at $700, naming AMD its top compute sector pick.

D.A. Davidson analyst Gil Luria maintained a Buy rating, acknowledging the near-term risk but emphasizing that global AI compute demand continues to outstrip supply, supporting the...