Advanced Micro Devices (NASDAQ: AMD stock) fell sharply on Tuesday as investors cashed in on extraordinary gains following an exceptional 2025.
At press time, AMD stock was trading around $213.23, nearly 4% lower than Monday’s closing.
The selloff underscores a simple market reality: after a 97% surge in 2025, and a stunning 235% rally from its April low, even the best stories attract profit-takers when they meet resistance.
AMD stock: Locking in gains after a historic 2025 run
AMD’s 2025 performance was nothing short of spectacular.
Starting the year around $130 and hitting April lows near $76, the stock then roared back, driven by surging demand for AI accelerator chips and major partnerships announced in October.
The OpenAI partnership on October 6 triggered a 56% monthly gain in October alone.
By October 29, AMD reached an all-time high of $267.08, before settling the year at $256.12.
For the full calendar year, AMD stock was up roughly 97%, making it one of the market’s top performers and consistently capturing Wall Street’s attention as Nvidia’s most credible challenger in AI infrastructure.
Tuesday’s pullback, while modest on the surface, reflects classic profit-taking behavior.
Traders who bought at $100 or even $200 now see shares worth $220, and many are choosing to lock in double- or triple-digit gains before the year gets older.
Technical resistance and sector rotation amplify the decline
Tuesday’s selling had a sharp technical dimension.
AMD’s 50-day moving average sits around $227.44, and the stock closed the day below that key support line, triggering algorithmic selling that momentum traders use to exit positions.
When a stock that has rallied as aggressively as AMD breaks below its 50-day average after failing to hold gains above recent highs, it signals that the near-term trend may be stalling.
The CES context also mattered.
While AMD’s CEO Lisa Su delivered a solid keynote unveiling new Ryzen AI 400 series chips, Ryzen AI Max+ processors for developers, and the Ryzen 7 9850X3D for gamers, the announcements were seen as largely incremental, not transformational.
AMD’s Ryzen AI 400 series (codenamed Gorgon Point) is a mid-cycle refresh using existing Zen 5 architecture rather than a leap to next-gen Zen 6. still strong, but not the “game-changer.”
More problematically, Intel unveiled Panther Lake chips built on its cutting-edge 18A process with 15-25% power efficiency gains, directly threatening AMD’s advantage in the AI-PC market share.
That competitive pressure, combined with reports that higher memory costs may force both AMD and Nvidia to raise GPU prices, potentially slowing buyer demand, created headwinds that offset AMD’s CES momentum.
Analyst sentiment is mixed. Morgan Stanley’s take on Tuesday was measured: AMD’s CES deliverables were solid, but don’t rewrite the bull case.
JP Morgan highlighted strong AI demand ahead, but also flagged supply normalisation risk, meaning AMD’s ability to win share now doesn’t guarantee dominance if Nvidia continues to pull away on systems integration and software.
Bernstein analyst Stacy Rasgon called AMD’s growth targets “somewhat aggressive/aspirational,” noting that success hinges entirely on the Helios rack system and MI450X/MI455X adoption rates that remain unproven at scale.
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