AMD Stock At Risk In 2027: Is ARK’s $15 Million Sale A Sign?
Advanced Micro Devices faces potential risks in 2027 despite a surging stock price and a $1 trillion market cap, as high valuation and ARK Invest's recent share sales spark market caution.
Advanced Micro Devices, Inc. (AMD) stands out as a premier performer in the current market. Over the past year, the AMD stock price has surged by nearly 285%, including an increase of nearly 180% in 2026 alone. Meanwhile, market leader Nvidia (NVDA) has grown by roughly 25% over the past year and about 21% in 2026. These numbers highlight AMD’s strong market dominance in recent months. Recently, AMD’s stock price hit a fresh all-time high, pushing the company’s market capitalization past the $1 trillion milestone. Although AMD has outperformed Nvidia over the past year, investors should be aware of potential risks. Let’s examine them.
AMD Stock May Be At Significant Risk In 2027
AMD currently carries a price-to-earnings ratio above 85, whereas Nvidia (NVDA) sits at 26 and Broadcom at 32. Consequently, AMD stock is considerably costlier than both Nvidia and Broadcom. This gap suggests that AMD’s valuation may have outpaced its actual growth outlook, which could cause trouble down the road. Consequently, the AMD stock price might encounter a correction toward the end of 2026 or during 2027.
Also Read: Citi Raises AMD Stock Price Target, Cites Meta Muse Release
Another element to weigh is Cathie Wood’s ARK Invest offloading over $15 million in AMD shares. This transaction followed AMD reaching a new all-time high earlier this month. Previously, the firm unloaded $110 million worth of AMD stock as well. While these liquidations may simply be profit-taking, they could also indicate deeper concerns. Even as ARK trimmed significant portions of its AMD position, it simultaneously grew its stake in Nvidia (NVDA) by purchasing nearly $81 million in Nvidia shares. This shift suggests the firm harbors greater confidence in Nvidia and potentially anticipates a sharp correction for AMD.
Frequently Asked Questions
01Why is AMD’s stock valuation considered high?
AMD features a price-to-earnings ratio surpassing 85, making it significantly more expensive than industry peers like Nvidia and Broadcom, which raises concerns that its valuation may be disconnected from its growth potential.
02What recent actions has ARK Invest taken regarding AMD and Nvidia?
ARK Invest recently sold more than $15 million in AMD shares following previous sales totaling $110 million. At the same time, the firm boosted its holdings in Nvidia by purchasing nearly $81 million worth of Nvidia stock.
