What Happened?

Shares of computer processor maker AMD (NASDAQ: AMD) jumped 7.8% in the afternoon session after stocks rebounded (Nasdaq +2.0%, S&P 500 +1.5%) following a report from The Wall Street Journal stating that the Trump administration's reciprocal tariffs, to be announced on April 2, 2025, would be more narrowly targeted. 

The market reaction indicated that investors took that as a sign the economic impact of the tariffs, particularly on inflation and growth, might not be as bad as they initially feared. That's a bit of a relief, which likely gave businesses and analysts some space to rethink their outlooks. Earlier, the administration had hinted at much broader tariffs that could have hit any country placing duties on U.S. imports, so this shift was likely a welcome surprise for the market.

The shares closed the day at $113.85, up 7% from previous close.

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What The Market Is Telling Us

AMD’s shares are quite volatile and have had 15 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. 

The biggest move we wrote about over the last year was 5 months ago when the stock dropped 9.6% on the news that the company reported weak third-quarter earnings results. Its revenue guidance for next quarter missed analysts' expectations. Revenue beat analysts' expectations by a narrow margin during the quarter, while EBITDA beat more convincingly. The outlook weighed on shares as expectations were likely high heading into the announcement amid the ongoing AI rave.

AMD is down 5.7% since the beginning of the year, and at $113.80 per share, it is trading 38.1% below its 52-week high of $183.96 from July 2024. Investors who bought $1,000 worth of AMD’s shares 5 years ago would now be looking at an investment worth $2,462.

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