Why AMD Stock Tumbled 18% in July

The world's largest semiconductor stocks lost a collective $1 trillion in market capitalization last month.

AMD investors were worried that tech companies were spending too much on AI.

Shares of the semiconductor company Advanced Micro Devices (NASDAQ: AMD) fell sharply last month as a sectorwide sell-off among semiconductor stocks weighed on AMD and its peers amid fears of AI overspending.

AMD shareholders were also concerned about a report that said AI company DeepSeek is developing its own AI processor.

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The tech stock was down by 18% by the end of July, according to data provided by S&P Global Market Intelligence .

Last month was not a great time for shareholders of semiconductor companies. Worries are spreading throughout the tech sector that artificial intelligence companies are spending too much on their AI infrastructure and won't receive a good return on that investment.

If tech companies pull back on their spending, it could directly impact AMD and its peers, as they've benefited immensely from the current AI spending spree. For example, tech companies are poised to spend $750 billion in capital expenditures this year alone, much of it for AI.