Why a New Core Scientific Deal Is a Big Win for AMD Stock

Technology stocks, once the market's biggest winners thanks to the artificial intelligence (AI) boom, have suddenly fallen out of favor on Wall Street. Even companies posting blockbuster earnings are finding it difficult to impress investors, as lofty expectations, growing fears of an AI bubble and concerns over whether the industry's massive spending spree will ultimately pay off have made the market far less forgiving. And Advanced Micro Devices (AMD) is one of the latest casualties of this shift in sentiment.

Although the chipmaker has yet to report its next earnings results, investors have become increasingly cautious about AI-related financing deals and whether hyperscalers' enormous AI investments can deliver sustainable returns. As a result, AMD shares have fallen 17.2% from their June all-time high of $584.73. But while many investors have turned cautious, Wedbush Securities believes the market may be missing the bigger picture. The investment firm sees AMD's newly announced partnership with Core Scientific (CORZ) as a key step that could expand the company's AI reach beyond the largest cloud providers and fuel its long-term growth.