On Wednesday, TD Cowen, a well-known research firm, adjusted its outlook on AMD (NASDAQ:AMD) shares, reducing the price target from $150.00 to $135.00 while still endorsing the stock with a Buy rating. Currently trading at $110.80 and with a market capitalization of $180.5 billion, AMD has shown significant volatility in recent months. According to InvestingPro data, the stock is trading near its 52-week low, presenting a potential opportunity for value investors. The analyst at TD Cowen, Joshua Buchalter, provided insights into the reasoning behind the change, emphasizing the need for AMD to demonstrate its capabilities in the competitive AI sector.
Buchalter’s statement shed light on the current situation, noting that while AMD’s recent performance could be seen as positive, it has been eclipsed by a strategic shift in its product lineup. The introduction of the MI355, which has been expedited, takes precedence over the MI300/325, leading to revised expectations for AMD’s data center GPU sales. Despite the adjustment, with a first half run-rate hovering around $7 billion, he suggests that concerns about a worst-case scenario for AMD are unwarranted.
The reassessment by TD Cowen also acknowledges the current trend favoring ASICs (application-specific integrated circuits) over GPUs for certain tasks. However, the firm believes that AMD’s potential in the data center GPU market remains a "show-me story" that is likely to succeed in the long run.
Buchalter reaffirmed his belief in AMD’s strategic direction, particularly in its efforts to enhance its software ecosystem and its ability to create and capture value within the rapidly growing AI compute market. He pointed out that AMD is progressing towards solidifying its status as a key competitor to NVIDIA (NASDAQ:NVDA), particularly as a merchant alternative in the AI space. Additionally, AMD is expected to continue gaining market share in the lucrative CPU market.
The new price target of $135.00 is based on a projected 22 times multiple on TD Cowen’s estimated earnings per share for AMD in 2026. Despite the lowered price target, the research firm’s sustained Buy rating indicates continued confidence in AMD’s long-term prospects.
In other recent news, Advanced Micro Devices, Inc. (AMD) has been in the spotlight with several analysts revising their expectations and price targets. Truist Securities cut AMD’s stock price target to $130 from $145, maintaining a Hold rating despite the company’s recent financial performance and market dynamics. Similarly, Citi analysts downgraded AMD shares from Buy to Neutral, reducing the price target to $110 from the previous $175, expressing concerns over potential inventory build-up of CPUs and a lack of specific forecasts for AI revenue.
On a more positive note, Cantor Fitzgerald reiterated an Overweight rating on AMD stock, maintaining a price target of $135.00. The firm’s analysis followed AMD’s recent financial update, which revealed a modest outperformance and an upward revision for the December and March quarters. Piper Sandler also kept an Overweight rating on the stock, albeit adjusting the price target for AMD shares to $140 from the previous $180, reflecting lowered expectations for the company’s performance in the coming years.
Lastly, Northland reiterated its Outperform rating and $175.00 price target for AMD stock, following the company’s latest financial results. The semiconductor firm reported earnings that matched expectations and provided guidance for the first quarter that aligns with the consensus. These are the recent developments that investors should be aware of as they navigate the evolving landscape of AMD’s stock performance.
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