AMD Stock Tumbles On Analyst’s Double Downgrade Flagging AI GPU Weakness: Retail Sentiment Holds Strong
By Stocktwits Inc | First Published Jan 8, 2025, 7:03 PM ISTAmid the downgrade, AMD announced a strategic collaboration with Absci Corp. (ABSI), a generative AI drug discovery firm.
Advanced Micro Devices Inc. (AMD) stock tumbled more than 3% in pre-market trading on Wednesday after HSBC analysts double downgraded the stock to ‘Reduce’ from ‘Buy’, slashing their price target on the shares by nearly half to $110 from $200.
As retail debated the report, AMD was the top trending ticker on Stockwits.
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The brokerage pointed to the company's artificial intelligence (AI) GPU roadmap not being as competitive as initially assessed, according to TheFly.
The downgrade comes after the semiconductor giant unveiled several new products at the Consumer Electronics Show (CES) 2025, which did not include any new GPUs.
HSBC noted that AMD’s AI GPU roadmap appears less competitive than expected, which could hinder its ability to challenge dominant players like Nvidia (NVDA).
The report highlighted AMD’s recently launched MI325 GPU's lukewarm reception. Analysts attributed this to Samsung’s production struggles with higher-spec HBM3e memory, which could potentially limit the GPU's performance.
The report further suggested that AMD’s future offerings, including the MI350 chipset, which will debut in late 2025, may struggle to compete with Nvidia’s established NVL rack platform.
Given these factors, HSBC forecasts that AMD may have trouble maintaining its market position against market incumbents like Nvidia and newer players like Marvell Technology Inc. (MRVL), given the current technology and market dynamics.
Retail sentiment on Stocktwits around AMD's stock also dipped to ‘bullish’ from ‘extremely bullish’ a day ago, as chatter slowed to ‘normal’ from ‘high’ levels.
Many users on the platform disagreed with HSBC’s assessment.
One user pointed out that while the stock may fall, it’s unlikely to dip as far as $100.
Another stated that while the stock may take a hit from today’s downgrade, it will recover next week.
Amid the downgrade, AMD announced a strategic collaboration with Absci Corp. (ABSI) to improve critical AI drug discovery.
Absci will deploy AMD Instinct accelerators and ROCm software to power advanced AI workloads, including creating entirely new antibodies from scratch using AI and computational methods without relying on existing antibody templates.
AMD also invested $20 million in Absci via a private investment in public equity (PIPE), signaling its commitment to diversifying AI applications beyond GPUs.
AMD’s stock has fallen nearly 13% over the last year.
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Read also: Retail Impressed With AMD’s CES 2025 Announcements, Expects ‘Strong Rebound’ For Stock In 2025 On Dell Partnership
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