Today’s market rout is being driven by key losses in a few major stocks. Among the lead decliners today is chip maker Advanced Micro Devices (NASDAQ:AMD). As of 2:15 p.m. Eastern, AMD stock is down a dramatic 7.5%, in an incredible move.
This decline comes on little company-specific news. That said, rival Micron (NASDAQ:MU) is set to report earnings after market close today, which many seem to think will underwhelm the market.
Well, a string of negative earnings reports today indicate that estimates may be too high. As we reported earlier, shares of car marketplaces CarMax (NYSE:KMX) and Carvana (NYSE:CVNA) sunk following very disappointing earnings. Additionally, Micron has already slashed its targets, and warned that earnings may decline 12%, with revenues declining nearly 7%. Those aren’t the kinds of numbers investors had previously expected.
Now, the question is whether this is all priced into the semiconductor space or not.
Let’s dive into what Micron’s potential woes could mean for AMD.
Why Is AMD Stock Plunging on Little News Today?
Interestingly, despite Micron being the company set to report earnings, AMD is the stock that’s dropped more. That appears to be the result of a rather intriguing upgrade from Wedbush on MU stock.
Wedbush upgraded Micron stock on its positioning relative to peers, and its current valuation in this market. According to Wedbush, this is a stock with downside that may be mitigated due to its previous warning. Perhaps this downside is not currently factored into the price for other players such as AMD.
We’ll have to see how Micron’s report ultimately comes in. If the company beats, perhaps AMD stock could rally to a greater degree. Right now, it’s a guessing game.
That said, I expect tomorrow’s session to bring even more volatility for both of these stocks. Strap in, it’s going to be a bumpy ride.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.