Why Chip Stocks Like AMD Are Tumbling Today

Advanced Micro Devices Inc AMD shares are trading lower, alongside several semiconductor names, in sympathy with Micron Technology Inc MU, which fell after the company reported fiscal first-quarter financial results that came in below analyst estimates.

• MU Q1 Revenue: $4.08 billion missed estimates of $4.12 billion
• MU Q1 EPS: $(0.04) missed estimates of $(0.01)

According to a regulatory filing, Micron entered into a restructuring plan in which it expects to reduce headcount by approximately 10%. In connection with the plan, the company expects to incur charges of at least $30 million in the second quarter of fiscal 2023.

"Micron's strong technology, manufacturing and financial position put us on solid footing to navigate the near-term environment, and we are taking decisive actions to cut our supply and expenses," said Sanjay Mehrotra, president and CEO of Micron. 

Multiple analysts also lowered price targets on Micron shares following the company's quarterly results. Both Micron and AMD operate in the chip space.

What Else: Several stocks are trading lower amid overall market weakness following better-than-expected U.S. GDP and jobless claims data, which have added to concerns of an overheating economy and tight labor market.

Thursday morning, billionaire hedge fund manager David Tepper said the risk/reward opportunity in the markets is skewed to the downside during an interview on CNBC's "Squawk Box."

"I think the upside/downside just doesn't make sense to me when I have ... so many central banks telling me what they're going to do," Tepper said.

Related Link: Billionaire David Tepper Is 'Leaning Short' As Central Banks Hike Interest Rates: Why He Says 'Don't Ignore' The Signs

He expects central banks across the globe to keep rates high for "a while." As a result, he is "leaning short" on equities. Tepper's comments may be adding some fuel to Thursday's selloff.

AMD Price Action: AMD has a 52-week high of $156.73 and a 52-week low of $54.57.

AMD shares are down 7.38% at $62.70 at time of publication, according to Benzinga Pro.

Photo: courtesy of AMD.