Wall Street analysts cuts price targets on AMD after data center revenue miss
Many analysts trimmed their outlooks on chipmaker Advanced Micro Devices after the company disappointed on data center sales. AMD reported $3.86 billion in data center chip sales in the fourth quarter. While this was higher 69% on a yearly basis, it fell short of the $4.14 billion forecast from analysts polled by FactSet. Although the company managed to beat estimates on both top and bottom lines, AMD’s data center segment is its most significant segment — leading analysts to lower their estimates in response to the weakness. The stock tumbled 9% during premarket trading on Wednesday. Here’s what analysts had to say. Bernstein lowers price target to $125 from $150 Analyst Stacy Rasgon’s new target indicates just 4.6% upside potential from Tuesday’s close. He kept his market perform rating on the stock. AMD “had one job…” Rasgon wrote in a note on Wednesday. “While forward expectations have been coming down for AMD into the print, the dynamics around the numbers do not appear all that favorable, and a datacenter GPU miss already in Q4 was not really in the cards,.” JPMorgan reiterates neutral rating, slashes price target to $130 from $180 The bank’s new price target implies upside of just 8.8%.Analyst Harling Sur noted that AMD may face limited operating leverage if it increases its research and development investments — which he believes are needed for it to keep up with the market leaders. “AMD is improving its competitiveness across CPU and GPU products with Ryzen, EPYC, and Radeon Vega platforms and is on track to improve its market share and drive meaningful revenue growth in the near term. Long term, we believe share gains are less certain,” Sur said. Bank of America cuts price target to $135 from $155, keeps neutral rating “AMD has not (yet) managed to articulate how it can carve an important niche versus NVDA’s dominance and custom ASIC chip’s growing importance in AI silicon,” analyst Vivek Arya wrote in a note. “Any upside surprise [is] largely dependent on share gains against INTC in more mature markets.” Morgan Stanley lowers price target to $137 from $147 Analyst Joseph Moore’s new price target is around 25% higher from Tuesday’s close price. Moore reiterated his equal weight rating, citing low enthusiasm stemming from a lack of upside to numbers. “Remain optimistic about the growth potential of the embedded and server segments, which have been underearning …. but lack of AI visibility & client outperformance in 2024 make RR still fairly balanced near term.” UBS keeps buy rating, but trims price target to $175 from $190 UBS’s new forecast calls for 46% upside for the stock. “We would characterize results and guidance as mixed – at best, though consistent w/ our preview that Street revenue and EPS needed to come down quite a bit as we saw 2025 as a ‘transition’ year for the data center GPU business. Data center results were a little light (and importantly, mostly due to GPU) as was guidance for the data center segment and this is really what matters for the stock. On the plus side though, AMD did give enough breadcrumbs on its AI roadmap to promote some optimism for 2H:25 with what looks like a ~1-quarter pull-in of its MI350 family of GPUs – which should compete well with NVDA’s B200 especially for inference.”
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