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Advanced Micro Devices (AMD) is set to report its fiscal first-quarter 2025 financial results on May 6. However, investors’ sentiment surrounding the stock is far from upbeat. This is due to AMD stock’s underperformance compared to the broader market. Notably, AMD stock is down about 33% over the past year. Year-to-date, AMD stock has dropped about 17%, while the S&P 500 Index ($SPX) has experienced a more modest decrease of 4.1% during the same period.
The underperformance reflects multiple headwinds. A key factor is AMD’s relatively small market share in the rapidly expanding artificial intelligence (AI) market, where rival Nvidia (NVDA) has taken a commanding lead. As AI continues to drive investor enthusiasm in the semiconductor space, AMD’s limited footprint has left it trailing.