Advanced Micro Devices, Inc (AMD) is undoubtedly one of the best-performing companies right now. AMD stock price has risen by nearly 285%% in the last year and nearly 180% in 2026 alone. Nvidia (NVDA), the market leader, has risen by about 25% in the last year and by nearly 21% in 2026. The figures give a clear cut image of AMD’s dominance in the stock market in recent months. AMD’s stock price also climbed to a new all-time high recently, with the company’s market cap crossing the $1 trillion mark. While AMD stock has clearly outshined Nvidia in the last year, there may be some risks that investors need to know about. Let’s discuss.

AMD Stock May Be At Significant Risk In 2027

AMD
Source: Markets.com

AMD has a price-to-earnings ratio exceeding 85. Nvidia’s (NVDA) price-to-earnings sits at 26 and Broadcom’s at 32. This makes AMD stocks significantly more expensive than Nvidia and Broadcom. The development could be a sign that AMD’s valuation is detached from its growth prospects. This could prove to be problematic in the future. AMD’s stock price could potentially face a correction in late 2026 or in 2027.

Also Read: Citi Raises AMD Stock Price Target, Cites Meta Muse Release

Another factor to consider is that Cathie Wood’s ARK Invest recent sold more than $15 million worth of AMD shares. The move came on the heels of AMD climbing to a new all-time high earlier this month. The firm had previously sold $110 million worth of AMD shares as well. The sell offs could be to book profits. But it may also be something more. While ARK sold large chunks of its AMD holdings, it, meanwhile, increased its Nvidia (NVDA) exposure, buying nearly $81 million worth of Nvidia stock. The move could be a signal that the firm is more bullish on Nvidia (NVDA), and could be expecting AMD to face a steep correction.

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