AMD stock rating downgraded to Neutral by Seaport Global Securities

Investing.com - Seaport Global Securities downgraded AMD (NASDAQ:AMD) stock rating from Buy to Neutral on Thursday, citing concerns about slowing progress in the company’s AI accelerator business. The stock, which has seen a remarkable 61% surge over the past six months and maintains a strong market position as a prominent player in the Semiconductors industry, is currently trading near InvestingPro’s Fair Value estimate.

The downgrade follows Seaport Global’s recent supply chain conversations indicating AMD is struggling to grow orders from customers announced at its AI event this summer. The research firm expressed concern that many headline customers have only purchased evaluation systems unlikely to convert into volume orders for at least one generation of MI systems.

Seaport Global also noted potential challenges with key customers, stating that AMD’s progress with Microsoft and Meta faces "intense scrutiny as those companies re-evaluate their AI spending plans." The firm observed that AMD’s use of discounts and other support mechanisms has become more widespread.

The research firm raised concerns about potential margin pressure, suggesting AMD "may lose negotiating leverage with current HBM suppliers." This could impact the company’s profitability in its AI accelerator segment.

While Seaport Global acknowledged AMD "remains a viable long-term competitor in the AI Accelerator market," it concluded that the timeframe for achieving meaningful market share is "further out" than previously anticipated, prompting the downgrade to Neutral. For deeper insights into AMD’s valuation and growth prospects, including 16 additional ProTips and comprehensive financial analysis, visit InvestingPro.

In other recent news, Advanced Micro Devices (AMD) has announced a partnership with IBM to develop next-generation quantum-centric supercomputing architectures. This collaboration aims to integrate AMD’s CPUs, GPUs, and FPGAs with IBM’s quantum computers to address complex computational problems. Additionally, Mizuho has raised its price target for AMD to $205, citing growth in AI chip demand, while maintaining an Outperform rating. The firm has also increased its revenue and earnings per share estimates for AMD’s September quarter to $8.80 billion and $1.15, respectively.

Furthermore, AMD’s Chief Accounting Officer, Philip Carter, has announced his resignation to take on a Chief Financial Officer role at another company. The company clarified that Carter’s departure is not due to any disagreements related to accounting practices. In market developments, AMD and ARM-based processors have continued to gain CPU market share against Intel, as reported by Bank of America. This shift in market dynamics was observed across all segments during the second quarter of 2025.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.