Stocks are little changed, but AMD and other tech stocks remain under pressure
Stocks were relatively unchanged on Wednesday as valuation concerns around the artificial intelligence trade persisted after chipmaker Advanced Micro Devices posted its latest quarterly results.
The S&P 500 and Dow Jones Industrial Average teetered around the flatline. The Nasdaq Composite advanced 0.1%.
AMD fell 2% after it issued margin guidance that only met analyst expectations, leaving investors wanting more. The company did post third-quarter earnings and revenue that beat analyst expectations.
That move comes after Palantir dropped about 8% on Tuesday, as investors worried that valuations for the software company — and the broader AI theme — have gotten untenable. After all, Palantir is trading at more than 200 times forward earnings.
AMD trades at a less-lofty 41 times forward earnings. However, that’s still well above the S&P 500′s 23 multiple.
Super Micro Devices, another AI-related stock, pulled back 3% on disappointing fiscal first-quarter results. Fellow AI play Arista Networks was down 6% following its latest quarterly results as well.
Yet, many investors remain optimistic that the long-term trend is still favorable for tech stocks, even if there is a near-term pullback, given the strength of spending in AI infrastructure.
Source : Cnbc.com
