January 10, 2025
Shares of computer processor maker AMD (NASDAQ:AMD) fell 5.9% in the morning session after Goldman Sachs analyst Toshiya Hari downgraded the stock from Buy to Neutral and lowered the price target from $175 to $129. The downgrade was driven by what the analyst considers a more modest demand outlook for AMD's PCs, servers, and data center graphics processing unit (GPUs) amid growing competition.
The shares closed the day at $115.97, down 4.8% from previous close.
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AMD’s shares are quite volatile and have had 19 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock dropped 5.2% on the news that the company received a double rating downgrade from HSBC. Analyst Frank Lee cut his rating of the chip maker from Buy to Sell and lowered the price target from $200 to $110 on concerns that AMD's competitive posture in the GPU market might not be as strong as initially anticipated. The analyst thinks the AI GPU growth for the first half of 2025 could decelerate due to weak demand for AMD's new MI325 GPU.
AMD is down 3.8% since the beginning of the year, and at $116.02 per share, it is trading 45.1% below its 52-week high of $211.38 from March 2024. Investors who bought $1,000 worth of AMD’s shares 5 years ago would now be looking at an investment worth $2,409.
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