Analysts reboot AMD stock price targets ahead of earnings

Yahoo

24-04-2025

Back in February, Lisa Su was feeling pretty good about the new year.
"For 2025, we expect the demand environment to strengthen across all of our businesses, driving strong growth in our data center and client businesses and modest increases in our gaming and embedded businesses," Su, chairwoman and CEO of Advanced Micro Devices () , said during the fourth-quarter earnings call.
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"Against this backdrop, we believe we can deliver strong double-digit percentage revenue and EPS growth year over year," she told analysts.
AMD beat Wall Street's expectations for sales and earnings in the quarter, but the stock fell after the Santa Clara, Calif., chipmaker's data-center segment missed estimates.The shares are down nearly 29% since January and off 42% from a year ago.
Shares of AMD and AI-chip heavy hitter Nvidia () slid recently after the companies warned that President Donald Trump's tariff plans could hurt semiconductor demand.
Nvidia plans to take a $5.5 billion charge tied to China exports, while AMD expects a hit of as much as $800 million.
AMD and Nvidia also lost ground on news that China's Huawei plans to begin mass shipments of an alternative to Nvidia's H20 processor, which the U.S. has barred from export to China. Huawei has already made some shipments of the new artificial intelligence chip, called the 910C, according to Reuters.
Huawei's 910C, a graphics processing unit, represents an architectural evolution rather than a technological breakthrough, sources told Reuters.
It achieves performance comparable to Nvidia's H100 chip by combining two 910B processors into a single package through advanced integration techniques, meaning it has double the computing power and memory capacity of the 910B.
The 910C also has incremental improvements, including enhanced support for diverse AI workload data.
Investment firms have issued research reports on AMD ahead of its earnings report, which is scheduled for May 6.Wedbush analysts slashed their AMD price target to $115 from $150, while maintaining an outperform rating on the shares.
"While we see both puts and takes for Q2 (and all of 2025) we believe headwinds likely more than offset potential tailwinds," the investment firm said.
"As such, we are moderating our outlook for AMD's results beyond Q1 as we reduce our expectations for both" computing and data-center GPU sales.
Wedbush said AMD continued to take computing-market share in both PCs and servers.
While AMD has outperformed in desktop, we see room for further notebook gains this year,' the firm said. 'China's seeming decision to tariff semiconductor products based on point of wafer origin could advantage AMD further in the compute market.'
China has adjusted its tariff rules for semiconductor products, declaring that the origin of chips will be determined by the location of the wafer fabrication facility, not the design or packaging location.
Chips that US companies manufacture in Taiwan or other non-US locations will be exempt from the 125% tariff China has imposed on US-origin goods.
Wedbush says AMD remains best positioned as an Nvidia alternative.
Barclays analyst Tom O'Malley lowered the investment firm's price target on AMD to $110 from $140 and affirmed an overweight rating on the shares.
The firm updated semiconductor and semiconductor capital equipment models to reflect tariffs and the trade war ahead of Q1 earnings. The analyst reduced target multiples, citing China and consumer risk.Bank of America Securities pared its price target on AMD to $105 from $110 and reiterated a neutral rating on the shares.
Following the effective shipment ban to China on April 15, the firm's new base-case assumptions for Nvidia and AMD now exclude sales of H20/MI308 products, which now require licenses to ship to China.
For calendar 2026 B of A assumes a roughly 4% and 5% sales and EPS impact for Nvidia and roughly 3% and 4% sales and EPS impact for AMD, respectively.
Bernstein reduced its price target on AMD to $95 from $125 and maintained a market perform rating.
The firm is also adjusting estimates to incorporate PC changes and the recent China AI accelerator license requirements, as well as AMD's $4.9 billion acquisition of ZT Systems, which materially lowers its forward revenue and EPS forecasts.
For AMD the AI story, already somewhat tenuous, is likely to take another material haircut on the back of new China sanctions and overall remains uncompetitive, Bernstein said.Sign in to access your portfolio