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Key Takeaways
- Advanced Micro Devices shares fell Wednesday after a double downgrade by analysts at HSBC to "reduce" from "buy."
- The firm cut its forecast for AMD's artificial intelligence chip revenue in 2025 and said an upcoming chip from the company is unlikely to compete with Nvidia's offerings.
- AMD shares have lost about a quarter of their value over the past three months, and HSBC analysts said they believe "there remains further downside."
HSBC analysts slashed the price of Advanced Micro Devices shares (AMD), citing fears about revenue from artificial intelligence.
HSBC dropped AMD’s rating two levels, to “reduce” from “buy,” and lowered its price target to $110 from $200. The AI chip company’s shares have lost about 24% over the past three months going into Wednesday, with the analysts adding they believe "there remains further downside.” AMD shares fell more than 4% in one day to $121.60.
Analysts Call AMD's AI Chip Plan 'Less Competitive' Than Expected
The analysts called AMD’s AI chip roadmap “less competitive” than previously anticipated, pointing to soft demand for its MI325 graphics processing unit (GPU). A new MI350 chip is expected from AMD later this year, but the analysts added it could struggle to compete 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, well below the $9.5 billion analyst consensus. AMD is expected to report 2024 fourth-quarter earnings in late January or early February, based on the timing of its results last year.
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