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Advanced Micro Devices (AMD), popularly known as AMD, is a semiconductor company specializing in high-performance computing, including through producing competitive CPUs and GPUs. The company is known for its innovative products that serve the gaming segment and data centers, and of its products, it is perhaps most known for its its trademark Ryzen processors.
With a valuation of $188 billion, its operations are spread across the Americas, Europe, the Middle East, and the Asia-Pacific, with its base in Santa Clara, California.
AMD stock is off to a slow start this year, with shares down about 7% over the past five trading days. This follows its 2024 performance in which it underperformed the broader market. After receiving negative commentary from an analyst, shares are trading near their 52-week low of $114.41.
AMD Stock Downgraded by Analyst
Last week, HSBC analyst Frank Lee downgraded AMD stock from a “Buy” to a “Sell” rating while slashing his price target on shares from $200 to a Street-low of $110. The move comes as Lee believes AMD to be “less competitive” compared to rival Nvidia’s (NVDA) product offerings.
The analyst noted that AMD’s AI GPU roadmap appears to be lagging behind Nvidia’s while stating the chipmaker will most likely be unable to “penetrate” the AI GPU sector as much as previously anticipated. Lee further pointed toward the soft demand for AMD’s latest MI325 GPU, citing Samsung’s inability to ramp up its HBM3e memory which is also used in AMD’s MI325 GPU.
Despite AMD’s plans to introduce its MI350 chip in 2H2025, a clear competitor to Nvidia’s NVL rack platform might not be seen until the end of 2025 or early 2026 with its MI400 launch.
On a separate note, AMD has announced a $20 million investment into biotech company Absci (ABSI) in a bid to deploy more of its AI accelerators and ROCM software.
AMD’s Solid Results
Advanced Micro Devices’ most recent quarter results came on Oct. 29, when it posted a profit of $771 million for its third-quarter results. This can also be translated to a profit of $0.92 on a per-share basis, just edging past analysts’ $0.91 per-share estimate. On the revenue side of things, the semiconductor company saw a 17.6% year-over-year increase to $6.82 billion, comfortably outperforming Wall Street’s $6.71 billion estimate.
Its earnings before interest, taxes, depreciation, and amortization (EBITDA) came to $1.89 billion, up from $1.44 billion last year. On the margins front, gross margin remained unchanged at 50% while the operating margin rose to 11% from last year’s 4%, signaling better cost efficiency from the management.
AMD management expects revenue between $7.2 billion and $7.8 billion for the current fourth quarter, falling short of the analyst’s $7.55 billion estimate at the midpoint. Despite this, the company remains confident in its ability to power through its data center segment, which gained a massive 122% in Q3.
Analyst Rating on AMD
Analysts continue to believe in the semiconductor company with a consensus “Strong Buy” rating for the stock alongside a mean price target of $185.86, which signifies upside potential of 59.4%.
The stock is under the watch of 38 analysts with 29 “Strong Buy” ratings, one “Moderate Buy” rating, and eight “Hold” ratings.
