AMD Shares Plunge After U.S. Export Ban Threatens $800 Million Hit
Shares of Advanced Micro Devices (NASDAQ:AMD) dropped more than 6% on Tuesday morning after the company said fresh U.S. export restrictions could seriously hit its business in China and other restricted markets.
- Warning! GuruFocus has detected 3 Warning Signs with AMD.
The new rules target AMD's MI308 accelerator chips, which are now limited from being shipped to places like China, Hong Kong, Macau, and a group of countries under D:5 classification. AMD plans to apply for export licenses, but there's no promise those will come through.
If things don't go their way, the company estimates the fallout could cost up to $800 million. That includes losses from unsold inventory, purchase agreements, and other reserves it may need to set aside.
This all plays into the bigger picture of rising U.S.-China tensions and tighter controls over advanced tech. AMD also noted that these are just estimates for now, and a lot depends on how things play out with regulators down the line.
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