Intraday plunge of 7%! AMD insiders selling stocks attracts market attention

AMD's recent stock performance has been poor, with an overnight drop of nearly 7% on March 19th. What exactly is happening with AMD?

On March 19th, some analysts pointed out three main reasons for AMD's poor stock performance:

Firstly, AMD insiders have sold nearly $16 million worth of AMD stock in the past 12 months, without buying any back. This has raised market concerns about whether AMD executives lack confidence in the company's future.

Secondly, AMD may face two major risks in the next two years: the decline of the AI infrastructure "boom" and stagnation in personal computer (PC) sales.

AMD Insiders Sold $16 Million in the Past Year Without Buying Back

Analysts suggest that AMD's poor stock performance may be related to market attention drawn by the sale of stocks by the company's management.

Public data shows that, as shown in the chart below, AMD insiders have sold approximately $7 million worth of stock in the past three months, with analysts not recording any stock purchases by them during the same period.

In the past 12 months, AMD insiders have sold nearly $16 million worth of AMD stock, without buying any back, only engaging in selling activities. Among them, an AMD insider named Forrest Norrod sold 10% of his holdings, approximately $5.3 million worth of AMD stock, at a price of $176 per share, lower than AMD's current stock price of $191.

Analysts point out that if multiple insiders sell a large amount of stock in a short period of time, it may indicate that they believe the stock's current value is higher than its actual value, or they hold pessimistic expectations for the company's future.

This requires caution, but further analysis is needed in conjunction with other information, as the reasons for insiders selling stock may vary, including but not limited to personal financial planning needs, stock option exercises, etc., and may not necessarily reflect insiders' views on the company's prospects.

Stock trading activities of insiders at different time periods in the past 12 months

Furthermore, examining the proportion of shares held by insiders can help understand whether the interests of the company's senior management and directors are aligned with shareholders. Data shows that AMD's senior executives and directors collectively hold 0.5% of the company's shares. Based on the stock price at the time, the value of these shares is approximately $1.7 billion. Analysts point out that this ownership percentage is a positive sign, as it aligns the interests of executives with ordinary shareholders

Two Major Risks AMD May Face in the Future

Analysis suggests that AMD may face two major risks in the next two years: the fading of the AI infrastructure "boom" and the stagnation of personal computer (PC) sales.

Currently, many companies are developing basic AI applications, such as hospitals, call centers, and enterprise sales departments using data aggregation and software-generated speech, images, and text to provide services to customers. In the short term, these applications are beneficial to all parties involved. However, the profitability of these basic applications may not meet expectations, leading to a cooling enthusiasm for AI infrastructure investments.

In addition, Sam Altman, the CEO of OpenAI, believes that the real opportunity lies in the consumer market. He claims that current technology can create "Artificial General Intelligence" (AGI), machines that can think like humans. However, despite rapid advancements in AI technology, the realization of AGI still faces many technical and ethical challenges, which may delay its commercial applications.

For AMD, a slower-than-expected development of AI technology or a decrease in market demand for AI infrastructure could have a negative impact on the company's stock price. Additionally, if the growth of the PC market remains weak, considering that PCs are a significant part of AMD's products, it will also adversely affect the company's performance.

Therefore, although AMD currently holds an important position in both the AI and PC markets, the company's future development still faces significant challenges and uncertainties.

AMD Collaborates with Sony to Develop Automotive LiDAR Systems

On March 19th, AMD announced that its advanced adaptive computing technology has been selected by Sony for use in its latest automotive LiDAR reference design. This collaboration aims to provide a powerful and efficient LiDAR solution for autonomous vehicles to enhance their safety performance.

AMD's adaptive computing technology supports efficient data processing and real-time analysis for LiDAR systems, greatly enhancing the performance of Sony's LiDAR system, providing higher accuracy, faster data processing, and increased reliability for autonomous vehicles.

LiDAR technology is a crucial part of autonomous vehicles, enabling real-time detection and analysis of objects in the surrounding environment to ensure safe driving.

The collaboration between AMD and Sony drives the development of automotive safety technology for autonomous vehicles, laying the foundation for achieving higher levels of autonomous driving functions