In This Article:
Advanced Micro Devices (AMD, Financial) stock dropped 2% in early trading on Tuesday After KeyBanc Capital Markets trimmed its price estimate by 32% to $150 from a previous target of $220 but has maintained an Overweight recommendation. AMD shares are at around $117 today, which is down almost 8% this week and 35% if looking at the stock's performance within the past six months.
The price target cut is negative, especially as AMD's MI325 has demonstrated only IP performance gains compared with its MI300 predecessor. Investment firm KeyBanc also pointed to a relatively stagnant new product growth prospect with respect to the MI3XX series and particularly the China-focused MI308 SKU, which may further depress the short-term outlook.
These analysts have lowered their forecast on AMD's 2025 data center GPU revenue to $10 billion. This can be attributed more to a higher proportion of sales from low-dollar salesgram SKUs and relatively limp growth in the Embedded segment. Nevertheless, KeyBanc still has a small measure of positive outlook, expecting a revival when the MI355 from AMD comes out in the second half of 2025.
The firm's view is that the current AI demand has only slowed down, which should see AMD capture more market share when it offers new products. KeyBanc believes the company should have better growth metrics beginning fiscal 2026. Thus, the promoters could still classify AMD as a long-term growth issue since the analysts still hold a positive outlook towards the future.
This article first appeared on GuruFocus.