KeyBanc cuts AMD stock price target to $140 from $150

On Wednesday, KeyBanc Capital Markets adjusted its price target on shares of AMD (NASDAQ:AMD), reducing it to $140 from the previous $150. The firm has kept its Overweight rating on the stock. Currently trading at $119.50, AMD shows significant volatility with a beta of 1.65, according to InvestingPro data. The stock is currently trading near its 52-week low of $112.80, while analyst targets range from $110 to $250. The revision follows AMD’s recent earnings report, which showed fourth-quarter results aligning with forecasts and first-quarter guidance meeting expectations. Despite this, AMD’s Data Center segment underperformed due to a slump in GPU demand, although this was balanced by robust Client segment revenues. InvestingPro analysis reveals the company maintains strong financial health with a current ratio of 2.5 and operates with moderate debt levels. InvestingPro subscribers have access to 15 additional key insights about AMD’s financial position.

AMD’s Data Center GPU revenues surpassed $5 billion in 2024, but the company has refrained from providing explicit guidance for 2025, only suggesting that Data Center growth, including GPUs, is expected to be strong, with double-digit percentage increases this year. The company’s revenue grew by 9.88% over the last twelve months to $24.3 billion, with analysts expecting continued growth in 2024. The anticipated mid-year launch of the MI355 is set to contribute to the Data Center segment’s growth, which is predicted to be more pronounced in the second half of the year. The first half of 2025’s Data Center revenues are projected to match those of the second half of 2024.

KeyBanc’s decision to maintain an Overweight rating on AMD stock is rooted in the expectation that the company will continue to capture market share and benefit from long-term trends in artificial intelligence (AI). The firm’s analyst commented on the balance of AMD’s performance, noting that despite the Data Center disappointment, there is still a positive outlook for AMD’s market position and growth in the AI sector.

The report further details that the reduction in estimates and the price target is a response to the mixed results in the Data Center GPU segment. Nevertheless, KeyBanc anticipates that the upcoming product launches and overall growth trajectory will support AMD’s progress in the competitive technology market.

Investors and market watchers are keeping a close eye on AMD’s strategic moves, especially in the Data Center and AI spaces, as these are key drivers for the company’s future growth and market share expansion. Based on InvestingPro’s Fair Value analysis, AMD currently appears slightly undervalued. For deeper insights, investors can access AMD’s comprehensive Pro Research Report, part of the extensive analysis available for 1,400+ US stocks on InvestingPro.

In other recent news, Advanced Micro Devices, Inc., commonly known as AMD, has been in the spotlight as several prominent financial firms have updated their outlook on the company’s stock. Barclays (LON:BARC) has maintained an Overweight rating on AMD shares with a price target of $140, emphasizing the company’s Client business as a key factor in its performance.

On the other hand, BofA Securities has lowered its price target for AMD to $135 while maintaining a Neutral rating, citing competitive challenges in the AI technology market. Northland has also weighed in, reaffirming an Outperform rating and a price target of $175. They expect AMD’s challenges in the Embedded and Game segments to evolve into slight advantages in 2025.

KeyBanc Capital Markets has revised its price target for AMD shares, lowering it to $150 from the previous $220, but maintained its Overweight rating. They attribute this to underwhelming demand for AMD’s MI325 and trimmed estimates for AMD’s data center GPU revenues in 2025. However, KeyBanc remains optimistic about AMD’s prospects, expecting a more substantial growth in 2026 with the release of the MI355.

These recent developments highlight the varying viewpoints of different financial institutions on AMD’s performance and future prospects. As AMD continues to navigate the competitive landscape, investors will be keenly watching the company’s moves and market response.

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