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On Wednesday, Piper Sandler analyst Harsh Kumar adjusted the price target for AMD (NASDAQ:AMD) shares to $140 from the previous $180 while keeping an Overweight rating on the stock. The revision reflects lowered expectations for the company’s performance in the coming years. Currently trading at $119.50, AMD shows significant volatility with a beta of 1.65. According to InvestingPro analysis, the stock appears slightly undervalued based on its Fair Value assessment.
Kumar’s report indicated a significant reduction in estimates for AMD’s financials for 2025 and 2026. This downward revision is attributed to what the analyst describes as an "air pocket" expected to impact the company for 6 to 9 months. AMD’s fourth-quarter GPU sales did not meet the analyst’s expectations, showing mid-single-digit quarter-over-quarter growth compared to the anticipated high-teens. Despite these challenges, InvestingPro data shows AMD maintains strong fundamentals with a current ratio of 2.5 and revenue growth of 9.88% over the last twelve months.
The analyst also forecasts a sequential decline in GPU sales for the March 2025 quarter, with a return to growth anticipated in the second quarter. The delay in growth momentum is partly due to the challenges faced by AMD’s MI GPUs, which are expected to recover as the MI350 reaches commercial distribution in the second half of 2025, aligning with the ramp-up of ZT.
Despite these setbacks, Kumar pointed out some positive developments for AMD. The gaming business seems to have stabilized, and the client segment is reportedly on solid ground. Moreover, AMD is continuing to gain market share in the server CPU space.
Kumar’s stance on AMD remains positive despite the price target adjustment, with the Overweight rating sustained due to the current valuation levels of AMD shares and the potential for growth in the latter half of 2025.
In other recent news, Advanced Micro Devices (AMD) continues to make headlines with its financial performance and market projections. After AMD’s latest financial results, Northland maintained an Outperform rating with a $175 target, highlighting the company’s anticipated robust growth in artificial intelligence (AI) and market share increases in the server and PC sectors. On the contrary, Goldman Sachs, UBS, Raymond (NSE:RYMD) James, and KeyBanc adjusted their price targets for AMD shares, citing mixed results in the Data Center and AI sectors.
Goldman Sachs downgraded the price target to $125 from $129, while UBS and Raymond James revised theirs to $175 and $150, respectively. KeyBanc also reduced its price target to $140 from $150, but all firms maintained their previous ratings on AMD’s stock.
These adjustments are based on AMD’s recent financial disclosures, including fourth-quarter 2024 results and first-quarter 2025 guidance, as well as the company’s projections for the AI and Data Center segments. Despite some concerns about the sustainability of AMD’s Client business and the performance in the Data Center sector, analysts from these firms generally express optimism for AMD’s future performance, especially with the upcoming release of the MI350 GPU family. These recent developments underscore the dynamic nature of the technology market and its impact on investor strategies.
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