Advanced Micro Devices Inc. (AMD), a key competitor to Nvidia in AI chip development, has experienced a 25% stock decline since the end of 2023. Recent lows have sparked concern among investors.
AI Forecast Omission and Market Reaction
During AMD’s recent earnings call, CEO Lisa Su chose not to provide guidance on the annual forecast for its key AI accelerator product. This decision left investors seeking clarity for the first half of 2025. According to IDC, Nvidia holds 89% of the global server GPU shipments, while AMD’s share is 10.3%.
Analyst Downgrades AMD's Outlook
Following the earnings call, Citi downgraded AMD due to the lack of AI revenue guidance and potential risks. Bank of America, HSBC, and Melius Research also expressed concerns about AMD’s competitive standing against Nvidia.
Future Prospects and Investor Opportunities
Despite the market’s negative reaction, AMD remains a significant player in the AI race. Alphabet and Amazon are increasing their spending on AI infrastructure, and AMD’s stock is 35% below the average analyst target, potentially offering investment opportunities at lower prices.
Although the lack of AI forecasts has raised investor doubts, AMD still holds promise due to its role in the ever-growing sector. The discrepancy between current stock price and analyst estimates may present an opportunity for those looking to invest amidst uncertainty.
