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Following HSBC downgrading of the semiconductor company's stock, Advanced Micro Devices (AMD, Financials) shares fell over 5% in early Wednesday trade, citing a less competitive position in the artificial intelligence GPU market compared to Nvidia (NVDA, Financials).
Citing reduced demand for AMD's MI325 GPU and supply issues with high-bandwidth memory from Samsung, HSBC analyst Frank Lee dropped AMD's recommendation to "Reduce" from "Buy" and cut the price target to $110 from $200. Lee further said that until its MI400 series release, scheduled in late 2025 or early 2026, AMD may not have a competitive AI rack solution.
Separately, AMD revealed a $20 million strategic investment in generative artificial intelligence-focused drug discovery firm Absci (ABSI, Financials). Aiming at boosting the usage of its Instinct AI accelerators and ROCm software in healthcare applications, AMD's first venture into life sciences is the private investment in public equity.
Absci acknowledged the cooperation, pointing out that internal drug discovery projects and AI-driven antibody design models' development would be supported by the funds. Sean McClain, the CEO, underlined the strategic importance of the cooperation, which will be covered at the J.P. Morgan Healthcare Conference on Jan. 15.
With AMD CTO Mark Papermaster characterizing the cooperation as a revolutionary step in biologic drug research, both firms stressed the potential for high-performance computing to hasten advances in drug discovery.
This article first appeared on GuruFocus.