AMD Stock Hits Crossroads as Intel Fears Spark Pullback, But Cathie Wood’s ARK Invest is Buying the Dip
After a blistering 28% rally in June, AMD’s stock is facing a critical test driven by renewed competitive concerns, a lofty valuation, and key technical levels. While some traders take profits, ARK Invest is aggressively accumulating shares.
SANTA CLARA, CA – Advanced Micro Devices (NASDAQ: AMD) is at the center of a classic Wall Street tug-of-war. After a powerful surge in June, the stock’s momentum stalled in early July as investors digested a mix of concerning competitive rumors and bullish institutional buying, creating a pivotal moment for the semiconductor giant.
The stock, which soared 28% last month, hit a short-term peak of $147.75 before pulling back to finish the holiday-shortened week at $137.90. This underperformance compared to the broader market has been fueled by several key factors.
Zen 6 Leaks Ignite Intel Competition Fears
A primary catalyst for the recent caution is a fresh leak regarding AMD’s next-generation “Zen 6” Ryzen processors. Reports suggest the new chips may feature 24 cores. While this is a formidable number, it pales in comparison to rival Intel’s rumored 52-core chips targeting the same high-end market.
This potential core-count disparity has sparked concerns that AMD could face a tougher battle in the premium workstation and data center arenas—critical markets for the ongoing AI and high-performance computing (HPC) race. The news has given pause to investors, prompting profit-taking after the significant run-up.
Valuation and Technicals Under the Microscope
With a market capitalization of approximately $223.6 billion and a trailing twelve-month P/E ratio hovering around 101, AMD’s valuation remains steep. This highlights the immense future growth that investors have already priced into the stock, leaving little room for competitive setbacks.
From a technical standpoint, AMD’s stock is approaching its 100-week simple moving average (SMA), a level that has historically served as a strong floor of support. Traders are watching this level closely. A bounce could signal a healthy consolidation, but a break below could open the door to a deeper correction, with the next major support level at the 50-week SMA around $126.
The Bull Case: ARK Invest Doubles Down
Despite the short-term headwinds, Cathie Wood’s ARK Invest sees a clear buying opportunity. The firm has been aggressively adding to its AMD position. On Monday alone, ARK purchased over 356,000 shares, valued at an estimated $51.24 million, across three of its ETFs. This follows the purchase of more than 130,000 shares the prior week.
This buying spree has elevated AMD to become ARK’s 11th-largest holding, signaling unwavering confidence in the company’s long-term dominance in the AI accelerator and data center markets.
For investors, the current landscape presents a clear conflict: the immediate risk of heightened competition and a rich valuation versus the long-term conviction of a major institutional buyer. How AMD’s stock navigates this crossroads will likely set its tone for the second half of the year.
