Advanced Micro Devices Inc (NASDAQ:AMD) shares are trading higher Friday after Federal Reserve Chair Jerome Powell signaled a dovish pivot at the Jackson Hole Symposium, raising expectations that interest rate cuts could arrive sooner than anticipated.
What To Know: Powell warned that downside risks to employment are rising as job growth slows to just 35,000 per month, a marked deceleration from 2024's pace.
With consumer spending weakening and GDP growth halving to 1.2% in the first half of 2025, Powell emphasized that the Fed "may warrant adjusting" policy if the slowdown deepens.
For high-growth technology companies like AMD, lower interest rates carry major implications. Growth stocks derive much of their valuation from expected future earnings, which are discounted back to present value using prevailing interest rates.
When rates fall, those long-dated cash flows become more valuable, providing a boost to companies investing heavily in innovation and expansion.
Read Also: Nvidia’s Earnings Could Make Or Break Momentum ETFs
What Else: AMD, a leader in advanced semiconductors and AI computing, fits squarely into this category. The company has been spending aggressively to capture market share in data centers, AI accelerators and high-performance PCs.
These are markets that promise robust future growth but require patient capital. In general, lower borrowing costs and reduced discount rates make that long-term growth story more attractive to investors.
With Powell now prioritizing labor market stability over inflation fears, the shift signals an environment more favorable to growth-oriented equities.
Price Action: According to data from Benzinga Pro, AMD shares are trading higher by 2.42% to $167.66 Friday morning. The stock has a 52-week high of $186.65 and a 52-week low of $76.48.
How To Buy AMD Stock
Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.
For example, in Advanced Micro Devices’ case, it is in the Information Technology sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.
Image: Shutterstock
