Shares of semiconductor company Advanced Micro Devices (NASDAQ: AMD) peaked in late 2021 at around $160. Since then, the semiconductor industry has shifted hard from shortages to gluts. Demand for PCs has crashed, and excess inventories are further pushing down orders for AMD's central processing units (CPUs) and graphics processing units (GPUs). Server CPUs, semi-custom chips that power the major game consoles, and embedded products are bright spots, but overall AMD's revenue and profits have taken a major hit.

As of May 3, AMD stock was down just about 50% from that all-time high reached in 2021. The company's first-quarter earnings report didn't help matters. While AMD beat analyst estimates across the board, the PC chip business collapsed, and the company's outlook was far from stellar.

While it may be tempting to buy the stock at what looks like a big discount, investors need to consider the pros and cons.

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Source Fool.com