Advanced Micro Devices (AMD) stock is notably lower Wednesday after financial services firm HSBC downgraded the chipmaker to Reduce (equivalent to a Sell) from Buy and slashed its price target to $110 from $200. The new price target is more than 10% below where AMD is currently trading.
The tech stock has been flat so far in 2025 after declining more than 18% in 2024. HSBC analyst Frank Lee is concerned about AMD's ability to penetrate the artificial intelligence (AI) graphics processing unit (GPU) market and compete with Nvidia (NVDA), according to Investing.com.
"We believe AMD wouldn't be able to penetrate the AI GPU market as much as we had earlier anticipated," Lee stated.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Lee also cited concerns around AMD's client momentum and non-AI data center revenue.
"AMD's share price has corrected by 24% in the past three months but we believe there remains further downside," Lee stated.
Where does Advanced Micro Devices stand with the rest of Wall Street?
Despite Advanced Micro Devices' recent troubles on the price charts, the majority of Wall Street remains bullish on the semiconductor stock.
According to S&P Global Market Intelligence, the average analyst target price for AMD stock is $180.32, representing implied upside of nearly 50% to current levels. Additionally, the consensus recommendation is Buy.
Financial services firm Mizuho is one of the bullish firms on the large-cap stock with an Outperform rating (equivalent to a Buy) and a $180 price target.
"We see AMD still in the early innings of its AI GPU ramp and well-positioned to gain share, while personal computer looks strong despite typical March quarter seasonality," wrote Mizuho analyst Vijay Rakesh in a December 5 note.
Financial services firm BofA Securities, meanwhile, has a Neutral rating (equivalent to a Hold) on AMD stock with a $155 price target.
The company serves a vast addressable market opportunity "in PC, server, high-end gaming, deep-learning and related markets where AMD has less than 30% value share currently," wrote BofA Securities analyst Vivek Arya in a December 9 note.
The analyst expects this to grow strongly over the next few years, but notes that "AMD's data center accelerator products remain 1+ year behind the leader's roadmap and face increasing competitive threats from custom silicon at cloud customers, posing a headwind to future share gains."
Related Content
-
Choose a Beneficiary for Your Estate Plan: It's Not 'Duck, Duck, Goose'Choosing a beneficiary for your 401(k), insurance policy or similar assets is crucial for estate planning. Here is how to do it, and six pitfalls to avoid.
-
T-Mobile's Free iPhone 17 Deal: A Smart Switch or a Hidden Catch?Receive a free iPhone 17 when you switch to T-Mobile. We'll explain whether the deal is worth it.
-
How an Expired Passport Thwarted Blackmail (and What Other Important Documents You Should Keep)An optometrist produced his expired passport to foil a blackmail attempt by the daughter of a former employee. After proving he was out of the country on the date of a forged diary entry, he took it a step further.
-
Optimize, Grow, Retain: The Power of Annual Client ReviewsFinancial advisers can use annual reviews to help enhance client outcomes, strengthen relationships and build their practice.
-
I'm a Real Estate Investing Pro: This Is What Investors Should Know About Truck Stop InvestmentsTruck stops might seem like good investments, but they can actually be a risky gamble due to unstable fuel prices, unreliable operators and coming changes in transportation. Instead, consider safer options like industrial or residential properties.
-
How Digital Platforms Are Changing the Way You Invest in GoldInvesting in gold is easier than ever thanks to digital platforms. Learn how online tools are lowering costs, increasing transparency and making gold accessible to all investors.
-
Stocks Rise to Start Fed Week: Stock Market TodayThe Nasdaq Composite and S&P 500 hit new record closing highs as Wall Street awaits the Fed's next rate cut.
-
Don't Disinherit Your Grandchildren: The Hidden Risks of Retirement Account Beneficiary FormsStandard retirement account beneficiary forms may not be flexible enough to ensure your money passes to family members according to your wishes. Naming a trust as the contingent beneficiary can help avoid these issues. Here's how.
-
This Is How Life Insurance Can Fund Your Dreams NowBeyond a death benefit, life insurance can provide significant financial value and flexibility through 'living benefits' while you are still alive, helping with expenses like education, business ventures or retirement.
-
Potential Trouble for Retirees: A Wealth Adviser's Guide to the OBBB's Impact on RetirementWhile some provisions might help, others could push you into a higher tax bracket and raise your costs. Be strategic about Roth conversions, charitable donations, estate tax plans and health care expenditures.
