Advanced Micro Devices (NASDAQ: AMD stock) was down roughly 5% Tuesday, extending a rough stretch that has erased most of the chipmaker’s post-2025 rally.
UBS still rates the stock Buy and says the real “inflection” is a second-half 2026 story, but the selloff shows investors are still uneasy about what near-term demand looks like.
Moreover, amid the ongoing US-Iran conflict, the investors are keeping a close eye on how much of AMD’s AI upside is exposed to geopolitics.
Why is AMD stock sliding again?
One pressure point is simply sector tone.
Chip stocks have been choppy since earnings season, with investors rotating in and out of “AI winners” depending on risk appetite, tariffs, and whether Big Tech spending is translating into visible payback.
The second pressure is China, and it’s newly specific.
The US officials are weighing caps that would limit how many Nvidia H200 chips can be exported to any single Chinese customer, around 75,000 per buyer, while noting AMD’s similar MI325 chips would also count toward that same per-customer cap.
If implemented, that’s not a blanket ban, but it would effectively put a ceiling on how large any one China AI deal can get, and markets don’t like revenue ceilings they can’t model.
The third pressure is trust after the February post-earnings wipeout.
AMD’s stock plunged more than 17% after results, even as CEO Lisa Su told CNBC demand was “on fire,” highlighting how sensitive investors have become to any hint that AMD’s AI ramp is not matching Nvidia-style expectations.
AMD’s outlook also pointed to an “unexpected boost” from AI chip sales to China that raised questions about underlying demand strength once that one-off fades.
Put those together and the logic of Tuesday’s drop looks less like “something broke” and more like “the bar is high, the tape is nervous, and the China rules could change again.”
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UBS says Buy: Here’s the thesis
UBS analyst Timothy Arcuri has been one of AMD’s more constructive voices.
In late January, UBS maintained a Buy rating and raised its price target to $330 from $300.
But UBS has also shown it’s willing to trim numbers as product timing and mix evolve: the analysts later lowered its target to $310 while keeping Buy, citing offsets like a cut to the 2026 gaming outlook even as the long-term AI story remains intact.
The core UBS argument is about timing.
UBS expects AMD’s next real opportunity for meaningful upside surprise may not arrive until later in 2026, when the MI455x chips begin ramping significantly in the fourth quarter.
UBS also said it sees a “clear path” to earnings per share exceeding $11 in 2027 and $15 in 2028: numbers that only work if AMD’s AI accelerators scale beyond pilots into broad deployment.
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