Shares of chip stocks, including Advanced Micro Devices Inc. ( AMD ) , are trading lower Monday. The sector may be selling off following strength in the first half of 2024, driven by AI momentum.

What To Know: Despite a high Price to Earnings (P/E) ratio of 235.09, indicating a high valuation, AMD’s Price to Book (P/B) ratio of 4.67 and Price to Sales (P/S) ratio of 11.61 suggest potential undervaluation in these aspects.

However, its Return on Equity (ROE) of 0.22%, well below the industry average of 4.79%, and lower-than-average EBITDA and gross profit indicate inefficiency and potential financial challenges. AMD's revenue growth of 2.24% also lags behind the industry average of 14.15%, highlighting a challenging sales environment.

What Else: Meanwhile, Nvidia Corp. ( NVDA ) , a major competitor, faces regulatory scrutiny from French antitrust regulators over alleged anti-competitive practices, potentially impacting investor sentiment in the broader semiconductor sector.

Despite these challenges, AMD maintains a lower debt-to-equity ratio of 0.05 compared to its top peers.

AMD Price Action: AMD shares were down 3.78% at $156.18 at the time of writing, according to Benzinga Pro.

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