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Advanced Micro Devices shares extended their recent run of declines Wednesday after a top Wall Street analyst cautioned that the chipmaker could continue to trail its peers' performance well into the new year.
The shares have fallen more than 28% over the past six months, well south of the 9% decline for the PHLX Semiconductor Sector benchmark. And they've lost around $63 billion in value since AMD issued a disappointing sales-and-profit outlook in late October.
Rivals such as Broadcom (AVGO) and Marvell Technology (MRVL) , meanwhile, have risen 31% and 55% respectively over the same period, with the former topping the $1 trillion valuation mark late last year.
Nvidia, meanwhile, briefly held the title of world's most-valuable company late last year, with a $3.4 trillion market cap. And its shares, while recently stalled, have risen more than 168% over the past year compared with a 4% gain for AMD.
HSBC analyst Frank Lee, who sees that trend continuing, lowered his price target on AMD (AMD) shares by $90 to $110 a share and clipped his rating on the stock to reduce from buy in a note published Wednesday.
"AMD’s share price has corrected by 24% in the past three months (versus -12% for the PHLX Semiconductor index), but we believe further downside remains," Lee and his team wrote.
HSBC sees 'downside momentum' for AMD
Lee said AMD's reliance on Samsung for its high-end memory chips could contribute to the "downside momentum" seen in demand for its new line of MI325 graphics processing units.
Samsung in fact posted weaker-than-expected fourth-quarter profit Wednesday in Seoul. That's thanks in part to surging R&D costs tied to the ramp of its new, higher-end HBM3e memory chips, which compete against South Korea-based rival SK Hynix.
"We now think AMD's AI GPU roadmap is less competitive than previously anticipated, limiting its penetration into the AI [graphics-processing-unit] market," Lee said.
Related: Analyst revisits AMD stock price target following 2024 slump
Lee also argues that AMD will continue to lag behind market leader Nvidia (NVDA) well into the new year. Nvidia is ramping up production of its new Blackwell line of AI-powering chips and this week unveiled new gaming and PC strategies.
"While AMD is set to launch its MI350 chip in [second-half 2025], it likely won’t have an AI-rack solution to compete with Nvidia’s NVL rack platform until late 2025 or early 2026, when we expect the MI400 to launch," Lee said.