/Stickers%20with%20AMD%20Radeon%20and%20Nvidia%20GeForce%20RTX%20graphics%20on%20new%20laptop%20computer%20by%20Piotr%20Swat%20via%20Shutterstock.jpg)
Advanced Micro Devices (AMD) is back in the investor spotlight after Jefferies downgraded the chipmaker from “Buy” to “Hold,” slashing its price target to $120. Analyst Blayne Curtis cited AMD’s widening performance gap with Nvidia (NVDA) and its “limited traction in AI,” warning that Street estimates remain too high. The note adds to a wave of recent downgrades, including cuts from HSBC and Melius, all of which point to tough competition ahead.
The downgrade comes as AMD shares decline 16.4% in the year to date. While that’s a milder drop than Nvidia’s 21% YTD loss, the timing couldn’t be more sensitive. AMD is trying to ramp up its MI300 accelerators to close the gap with Nvidia’s dominance in AI infrastructure, but delays and execution risks persist.
With AI demand booming, investors are now forced to ask: Is AMD’s dip a long-term buying opportunity, or a sign of further downside ahead?
About AMD Stock
Advanced Micro Devices (AMD), based in Santa Clara, California, is a top semiconductor company specializing in high-performance computing, graphics, and adaptive systems on chips (SoCs) for PCs, gaming, and data centers. The company has a market cap of roughly $167 billion and competes directly with Nvidia and Intel (INTC).
AMD shares have dropped over 44% in the past 12 months and recently pulled back, trading near $101 — well below their 52-week high of $187.
On a valuation basis, AMD trades at 27.6x forward earnings and about 6.7x sales — high by historical standards. Bulls argue this premium is warranted due to AMD’s leadership in CPUs and growing exposure to AI acceleration. However, skeptics point to the firm’s slower-than-expected ramp in AI GPUs and rising competition from both Nvidia and Intel.
AMD Beats on Earnings
AMD beat Q4 2024 expectations with a revenue of $7.7 billion and adjusted EPS of $1.09 versus estimates of $1.08. Still, the company’s forward guidance was disappointing, especially in the Data Center unit. Despite the hype around its MI300X accelerators, actual traction appears limited, which has fueled concerns about AMD’s ability to challenge Nvidia’s dominant 89% market share in AI server GPUs.
Looking ahead, AMD projected Q1 2025 revenue of $7.1 billion, below analyst expectations. The company cited longer enterprise deployment cycles and delayed hyperscaler deals as reasons for the weaker outlook. Full-year EPS forecasts have since been revised downward across the Street.
Management acknowledged the challenge of catching up to Nvidia’s new Blackwell architecture and hinted at elevated R&D spending to maintain relevance in AI compute. That could weigh on profitability in the near term.
What Do Analysts Expect for AMD Stock?
Despite growing caution, Wall Street still leans bullish on AMD. The stock carries a “Moderate Buy” rating across 42 analysts tracked by Barchart. Of those, 27 rate it a “Strong Buy,” one a “Moderate Buy,” and 14 a “Hold.” Ratings have trended lower from three months ago, when AMD held a 4.61 consensus rating. The current average is 4.31.
The mean price target stands at $146.71, implying upside of about 45% from current levels. However, Jefferies’ $120 target is among the most bearish on the Street, signaling diverging views on AMD’s near-term upside.
While the competitive gap with Nvidia remains a risk, bulls argue that AMD’s role as the primary alternative in AI compute could gain favor as customers seek cost-efficient options. Investors should closely monitor MI300 deployment updates and any traction with enterprise or cloud customers in upcoming quarters.
