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
-
The 'Vinyl Rule' of Retirement: Plan for Two Sides in Your Next ActBecause “Life is what happens when you’re busy making other plans.”
-
Five Destinations for Active and Chill Travelers AlikeWhether you reach for a paddleboard or a lounge chair, find your groove in a location that offers something for both kinds of travelers.
-
I'm a Financial Planner: Here Are Five Phases of Retirement Planning You Have to Get RightA solid retirement plan is a must, but you can't go halfway. Neglecting just one area of your plan could cause the whole thing to collapse.
-
An IRS Enrolled Agent's Top 10 Reasons to Stop Doing Your Own TaxesTaxes can get complicated quickly, and the more money you have, the tougher they tend to be. So, if you have any of these 10 tax situations, don't risk it.
-
Stocks Slip as Job Growth Stalls: Stock Market TodayThe August jobs report came in much weaker than expected, while the unemployment rate ticked higher.
-
Dismal August Jobs Report Offers Rate-Cut Relief: What the Experts Are SayingThe August jobs report came in much lower than expected, lifting the odds that several rate cuts will come through by year's end.
-
Greed, Fear and Market Volatility: A Financial Adviser's Guide to Keeping Emotions Out of Investment DecisionsDon't panic! And don't be so confident in the stock market that you overlook risk. Instead, be logical. Your retirement security could depend on it.
-
Want a Financial Adviser Who Shares Your Faith? Look for One With a CKA DesignationFinancial professionals with a Certified Kingdom Advisor certification are committed to integrating biblical principles with sound financial advice.
-
S&P 500 Hits New High on Jobs Friday Eve: Stock Market TodayThe S&P 500 hit a new all-time closing high and most of the stocks in the Dow Jones Industrial Average were up the day before a critical jobs report.
-
SPACs, SMRs and How to Invest in the Nuclear InsurgencyBig nuclear deployments are in process, but small modular reactors could be a better way to meet rapidly rising electric power demand.
