AMD Stock Tumbles Amid Tariff Fears and Weak Jobs Data

On September 5th, 2025, Advanced Micro Devices (AMD) stock faced a significant decline, dropping 6% in the day's trading. The chip company's share price had been down as much as 7.2% earlier in the session.

The pullback in AMD stock was driven by a combination of bearish factors. Firstly, the latest U.S. jobs report showed much weaker employment growth than economists had forecasted, with only 22,000 nonfarm jobs added in the month, far short of the expected 75,000. While the soft jobs numbers could potentially lead to a rate cut by the Federal Reserve, the report has made investors nervous about the state of the U.S. economy.

Additionally, AMD's valuation is under pressure due to confirmation from the Trump administration that tariffs will be imposed on semiconductors manufactured outside the country. As AMD relies on Taiwan Semiconductor Manufacturing for the fabrication of most of its designs, the company is likely to face margin pressures when the new tariffs go into effect.

Despite AMD's continued success in gaining market share from Intel in the central processing unit (CPU) market, the company's most important long-term catalyst remains its performance in the graphics processing unit (GPU) market, particularly for artificial intelligence (AI) applications. However, Nvidia continues to maintain a significant technology advantage in the AI GPU category, helping it command far superior margins compared to AMD.

While AMD appears to have a solid second-place position in the AI GPU market, Nvidia's lead may not change in the near future. Nevertheless, AMD's position could still power big gains for its stock over the long term, though the company's stock is not considered a low-risk bet.