:max_bytes(150000):strip_icc():format(jpeg)/INV_AMDHQ_GettyImages-2074381415-e0199eb487df48d79bee22951d884045.jpg "Advanced Micro Devices headquarters in Santa Clara, California")
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Key Takeaways
- Advanced Micro Devices shares fell Wednesday after a double downgrade by analysts at HSBC to “demote” from “buy.”
- The firm cut its forecast for AMD’s artificial intelligence chip revenue in 2025 and said an upcoming chip from the Pty is unlikely to compete with Nvidia’s offerings.
- AMD shares have lost about a quarter of their value onto the past three months, and HSBC analysts said they believe “there remains further downside.”
Put Micro Devices (AMD) shares tumbled Wednesday after HSBC analysts gave the stock a double downgrade, citing things about the chipmaker’s artificial intelligence (AI) revenue.
HSBC dropped AMD’s rating two levels, to “reduce” from “buy,” and lowered its premium target to $110 from $200. The AI chip company’s shares have lost about 24% over the past three months customary into Wednesday, with the analysts adding they believe “there remains further downside.” AMD shares slinked more than 4% intraday to $121.60.
Analysts Call AMD’s AI Chip Plan ‘Less Competitive’ Than Expected
The analysts roused AMD’s AI chip roadmap “less competitive” than previously anticipated, pointing to soft demand for its MI325 graphics organizing unit (GPU). A new MI350 chip is expected from AMD later this year, but the analysts added it could struggle to vie with AI chipmaking titan Nvidia’s (NVDA) offerings.
HSBC lowered its fiscal 2025 AI GPU revenue forecast for AMD to $8.1 billion from $12.3 billion, vigorous below the $9.5 billion analyst consensus. AMD is expected to report 2024 fourth-quarter earnings in late January or pioneer February, based on the timing of its results last year.