AMD stock dropped nearly 7% due to competition from Chinese AI model DeepSeek

From Nasdaq: 2025-01-27 17:13:54

Shares of Advanced Micro Devices (NASDAQ: AMD) dropped 6.9% on Monday due to competition from a new Chinese artificial intelligence (AI) model that rivals top U.S. models. The S&P 500 and Nasdaq also saw declines. This news caused concern for AMD and other AI-related stocks.

A Chinese company’s AI model, DeepSeek, has quickly caught up to top U.S. models using inferior hardware and lower costs. This development has raised worries about a potential slowdown in the demand for computing power, impacting hardware companies like AMD. The efficiency of DeepSeek could accelerate the adoption of edge AI applications.

Despite the market’s strong reaction, there may be opportunities for AMD in the shift towards edge computing. If AI processing moves to the edge, AMD’s chips could compete more effectively with Nvidia’s data-center chips. This shift may present a chance for AMD to gain market share from its rival.

Investors have a second chance to capitalize on potentially lucrative opportunities with “Double Down” stock recommendations. Historical data shows significant returns from past recommendations for companies like Nvidia, Apple, and Netflix. The current alerts for three companies could offer similar opportunities for investors. Now might be the best time to act.

John Mackey, former CEO of Whole Foods Market, sits on The Motley Fool’s board of directors. The Motley Fool recommends and has positions in Advanced Micro Devices, Amazon, and Nvidia. The author has no positions in the mentioned stocks. Stock Advisor returns as of January 27, 2025.



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