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Santa Clara, California-based Advanced Micro Devices, Inc. (AMD) produces semiconductor products and devices. Valued at $188.2 billion by market cap, the company offers products such as microprocessors, embedded microprocessors, chipsets, graphics, video and multimedia products and supplies it to third-party foundries, as well as provides assembling, testing, and packaging services.
Shares of this semiconductor giant have underperformed the broader market considerably over the past year. AMD has declined 32.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 22.7%. In 2025, AMD stock is down 4%, compared to the SPX’s 2.7% rise on a YTD basis.
Narrowing the focus, AMD’s underperformance looks less pronounced compared to the iShares Semiconductor ETF (SOXX). The exchange-traded fund has gained about 10% over the past year. Moreover, the ETF’s 1.2% gains on a YTD basis outshine the stock’s losses over the same time frame.
AMD's underperformed due to softness in the industrial market and competition from a new AI model out of China, DeepSeek. Analysts are cautious about its growth in AI, gaming anticipated to drag down results, and increased competition may impact graphics market share in 2025. Investors are concerned about AMD's ability to capture a significant share in the AI market.
On Oct. 29, AMD shares closed up more than 3% after reporting its Q3 results. Its adjusted EPS of $0.92 beat Wall Street expectations of $0.91. The company’s revenue was $6.8 billion, surpassing Wall Street forecasts of $6.7 billion. For Q4, AMD expects revenue to be between $7.2 billion and $7.8 billion.
For the current fiscal year, ended in December 2024, analysts expect AMD’s EPS to grow 27.6% to $2.54 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 39 analysts covering AMD stock, the consensus is a “Strong Buy.” That’s based on 28 “Strong Buy” ratings, one “Moderate Buy,” and 10 “Holds.”
This configuration is less bullish than a month ago, with 30 analysts suggesting a “Strong Buy.”
On Jan. 30, Wells Fargo & Company (WFC) analyst Aaron Rakers maintained a “Buy” rating on AMD with a $165 price target, implying a potential upside of 42.3% from current levels.
The mean price target of $171.92 represents a 48.3% premium to AMD’s current price levels. The Street-high price target of $250 suggests an upside potential of 115.6%.
