Shares of chief rival Nvidia are having their worst month in three years. What's an investor to do?

Quotes of processor maker AMD have fallen by almost a quarter since the beginning of November: they may show the worst result for the month since September 2022. Investors are concerned about everything from price pressure and interest rates to the rapidly changing competitive environment in the field of artificial intelligence. Analysts' opinions differ: some note investors' wariness about the position of Nvidia's main competitor in the AI market, while others remain bullish on the company's long-term prospects.

AMD shares are under pressure from concerns about rising manufacturing costs, high interest rates and competition in artificial intelligence, MarketWatch writes.

Thus, Mizuho analyst Jordan Klein considers the rise in memory chip prices due to the mass construction of data centers for AI to be a cause for concern. Memory price hikes threaten AMD's PC and Gaming (Client and Gaming) segment, which generates more than 40% of the company's net revenue. If AMD raises prices to offset component costs, it could suppress consumer demand in 2026, Klein warned.

Investors are also concerned about a possible slowdown in ChatGPT's growth in usage and downloads, Klein added. In October, chatbot developer OpenAI signed a multi-year contract with AMD to buy its AI chips. However, the new version of Google's Gemini 3.0 chatbot outperformed OpenAI's competitor in solving complex problems.

In addition, investors in AMD and Nvidia stock are spooked by the growing interest of large customers, led by Meta Platforms, in Google's AI processors (TPUs), MarketWatch notes. Bernstein analyst Stacey Rasgon questioned the relevance of AMD's 2030 business plan, "in a world where Gemini hypothetically dominates ChatGPT and TPUs are proving viable as alternative sources of supply for an expanding range of AI customers," MarketWatch writes.

Finally, Wall Street remains uncertain about whether the Fed will decide to cut rates at its next meeting in December. This is critical for growth-oriented tech stocks, which are traditionally sensitive to borrowing costs, MarketWatch recalls.

Wedbush analyst Dan Ives remains positive on AMD: he included the company's securities in the top ten best technology stocks to invest in the era of the "AI revolution," noting their attractive valuation and the company's potential to increase its share of the AI market. One of Wall Street's top bulls, Ives remains optimistic about the technology sector through the end of 2025 and into 2026, comparing the current situation to the start of the growth cycle in 1996 rather than the dot-com bubble of 1999.

According to FactSet, the sentiment on Wall Street regarding AMD has shifted toward a "buy" recommendation over the past three months: the number of Buy and Overweight ratings increased from 40 to 46, while the doubters' camp (Hold rating - advice to "hold") decreased from 17 to 12. The average target price of the chipmaker's shares is $283.9 per share, which implies a 38% growth in the stock price over a one-year horizon.

This article was AI-translated and verified by a human editor