Advanced Micro Devices, Inc. (NASDAQ:AMD) shares are trading lower by 1.94% to $108.09 Friday morning. The stock is trading lower alongside the Nasdaq-100 after July PPI data showed greater-than-expected inflation.
Higher inflation often leads to increased costs for raw materials and manufacturing inputs. As a semiconductor manufacturer, AMD relies on various components and materials. If these costs rise significantly, it could impact the company’s profit margins.
Inflation can also decrease consumers’ purchasing power, potentially leading to reduced demand for electronics, including AMD’s products. Consumers might delay or scale back purchases due to higher prices.
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Additionally, heightened inflation can prompt the Fed to consider raising interest rates. Higher rates could lead to increased borrowing costs for companies like AMD, impacting its investment plans and valuation.
Shares of semiconductor and chip stocks are also trading lower this week amid overall market weakness and amid a possible selloff following the recent AI surge.
According to data from Benzinga Pro, AMD has a 52-week high of $132.83 and a 52-week low of $54.57.
