Advanced Micro Devices (AMD) stock is notably lower Wednesday after financial services firm HSBC downgraded the chipmaker to Reduce (equivalent to a Sell) from Buy and slashed its price target to $110 from $200. The new price target is more than 10% below where AMD is currently trading.
The tech stock has been flat so far in 2025 after declining more than 18% in 2024. HSBC analyst Frank Lee is concerned about AMD's ability to penetrate the artificial intelligence (AI) graphics processing unit (GPU) market and compete with Nvidia (NVDA), according to Investing.com.
"We believe AMD wouldn't be able to penetrate the AI GPU market as much as we had earlier anticipated," Lee stated.
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Lee also cited concerns around AMD's client momentum and non-AI data center revenue.
"AMD's share price has corrected by 24% in the past three months but we believe there remains further downside," Lee stated.
Where does Advanced Micro Devices stand with the rest of Wall Street?
Despite Advanced Micro Devices' recent troubles on the price charts, the majority of Wall Street remains bullish on the semiconductor stock.
According to S&P Global Market Intelligence, the average analyst target price for AMD stock is $180.32, representing implied upside of nearly 50% to current levels. Additionally, the consensus recommendation is Buy.
Financial services firm Mizuho is one of the bullish firms on the large-cap stock with an Outperform rating (equivalent to a Buy) and a $180 price target.
"We see AMD still in the early innings of its AI GPU ramp and well-positioned to gain share, while personal computer looks strong despite typical March quarter seasonality," wrote Mizuho analyst Vijay Rakesh in a December 5 note.
Financial services firm BofA Securities, meanwhile, has a Neutral rating (equivalent to a Hold) on AMD stock with a $155 price target.
The company serves a vast addressable market opportunity "in PC, server, high-end gaming, deep-learning and related markets where AMD has less than 30% value share currently," wrote BofA Securities analyst Vivek Arya in a December 9 note.
The analyst expects this to grow strongly over the next few years, but notes that "AMD's data center accelerator products remain 1+ year behind the leader's roadmap and face increasing competitive threats from custom silicon at cloud customers, posing a headwind to future share gains."
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