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Santa Clara, California-based Advanced Micro Devices, Inc. (AMD) produces semiconductor products and devices. Valued at $161.8 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.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and AMD perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the semiconductors industry. AMD's strong brand and unique technology give it a competitive edge in the semiconductor market. Their products, including CPUs, GPUs, and APUs, are recognized for their performance and quality. With a diverse product portfolio that caters to multiple markets, AMD is well-positioned for growth.
Despite its notable strength, AMD slipped 11.4% from its 52-week high of $227.30, achieved on Mar. 8, 2024. Over the past three months, AMD stock declined 26.7%, underperforming the Nasdaq Composite’s ($NASX)1.1% dip during the same time frame.
In the longer term, shares of AMD dipped 17.3% on a YTD basis and 43.4% over the past 52 weeks, significantly underperforming NASX’s YTD losses of 2.4% and 18.2% returns over the last year.
To confirm the bearish trend, AMD has been trading below its 50-day and 200-day moving averages since October 2024.
AMD's stock has fallen considerably since its peak in March 2024 due to underperformance in the industrial market, competition from Chinese AI model, DeepSeek which created an AI chatbot for a fraction of the cost spent by U.S. firms, and concerns about capturing a significant share in the AI market. Analysts are cautious about its growth in AI and increased competition may impact its graphics market share in 2025. Additionally, investors are worried about AMD losing ground to NVIDIA Corporation (NVDA) in the AI race.
On Feb. 4, AMD shares closed up more than 4% after reporting its Q4 results. Its adjusted EPS of $1.09 beat Wall Street expectations of $1.07. The company’s revenue was $7.7 billion, surpassing Wall Street forecasts of $7.5 billion. For Q1, AMD expects revenue in the range of $6.8 billion to $7.4 billion.
In the competitive arena of semiconductors, NVDA has taken the lead over AMD, showing resilience with a 7% loss on a YTD basis and a 60.9% uptick over the past 52 weeks.
Wall Street analysts are moderately bullish on AMD’s prospects. The stock has a consensus “Moderate Buy” rating from the 42 analysts covering it, and the mean price target of $147.63 suggests an ambitious potential upside of 47.8% from current price levels.
