Thanks to its size and the contrast between the regular session endorsement and the after-hours hit, Nvidia (NASDAQ: NVDA) has been making headlines on April 16 as President Donald Trump banned the shipping of advanced semiconductors to China.
Despite drawing much less attention, Advanced Micro Devices (NASDAQ: AMD) has been hit just as hard. The firm revealed that the new measure will cost it approximately $800 million, and AMD shares plunged 6.35% in the first hours of the Wednesday session.
At press time, they are changing hands at $89.24.
How Trump made the AMD stock bear case stronger
Unfortunately for AMD investors and bulls, this development is just the latest in a string of factors that have been lowering the semiconductor stock’s price and turning Wall Street experts increasingly bearish.
On April 11, for example, Bank of America’s (NYSE: BAC) Vivek Arya lowered his 12-month forecast from $135 to $110 due to the expected 9% to 12% sales decline in 2025 and 2026.
His decision to retain a ‘neutral’ rating, however, makes sense despite the drop in the price target. For all the headwinds, Advanced Micro Devices has been recording multiple successes, not the least of which is that it’s catching up to Nvidia’s products in terms of performance and energy consumption.
How low can AMD stock go?
Furthermore, though the current trade war indicates AMD shares are unlikely to enjoy a significant rally in the foreseeable future, the company’s relative lagging behind during the 2024 artificial intelligence (AI) – paired with its business being far closer in scale to Nvidia than company valuation would indicate – positions the equity as relatively resistant in case of a greater crash.
In the short term, a plunge below $80 is a possibility given how AMD stock reacted to the initial Liberation Day shock, though a fall under $70 is unlikely unless the equity markets entirely lose their footing – a situation that, admittedly, is not out of the question.
Featured image via Shutterstock
