On Wednesday, Truist Securities expressed a cautious stance on Advanced Micro Devices, Inc. (NASDAQ:AMD), with analyst William Stein reducing the firm’s price target on the company’s shares to $130 from the previous $145. Currently trading at $109.29, AMD is near its 52-week low of $112.80, significantly below its high of $227.30. Despite this adjustment, the Hold rating on AMD stock was upheld. According to InvestingPro analysis, AMD appears undervalued based on its Fair Value calculation. Stein’s assessment comes in light of AMD’s recent financial performance and market dynamics, particularly in the datacenter sector.
AMD’s fourth-quarter results surpassed analyst predictions, largely due to robust performance in the client segment and, to a lesser extent, gaming. With revenue growth of 9.88% over the last twelve months and a healthy gross profit margin of 52.12%, the company maintains strong fundamentals. However, the datacenter results did not meet expectations and the company has signaled a downward revision for the first quarter, with projections for the first half of 2025 remaining flat compared to the second half of 2024. This outlook is somewhat disheartening, considering the current strength of the market. InvestingPro subscribers can access 15+ additional insights about AMD’s financial health and growth prospects.
The company has also announced an earlier-than-anticipated launch of its next-generation datacenter GPU in mid-2025, which, while potentially positive, could afford NVIDIA (NASDAQ:NVDA) more opportunity to solidify its market dominance. Stein also shared concerns about the x86 architecture facing increased competition from emerging CPU rivals.
In light of these developments, Truist Securities has adjusted its forecast for AMD’s earnings per share for the calendar year 2026 to $5.67, a slight decrease from the previous estimate of $5.81. The new price target of $130 is based on a 23 times multiple of the revised CY26 earnings per share, which includes a 10 times discount relative to the 33 times multiple assigned to AMD’s datacenter peers.
In other recent news, Advanced Micro Devices (AMD) has been the focus of various analysts’ reports. Cantor Fitzgerald maintained an Overweight rating on AMD stock with a target price of $135. The firm highlighted AMD’s Client segment as a key driver of growth, with a 23% quarter-over-quarter increase contributing to a substantial 52% growth in 2024. However, they noted that Data Center results and forecasts fell short of consensus expectations.
On the other hand, Citi analysts downgraded shares of AMD from Buy to Neutral, reducing the price target to $110. The decision came after AMD posted its latest financial results and guidance, which showed increased CPU sales but lacked specific forecasts for AI revenue. Citi’s analysis suggests potential margin dilution and a possible inventory build-up of CPUs.
Piper Sandler adjusted the price target for AMD shares to $140 while keeping an Overweight rating. The revision reflects lowered expectations for the company’s performance in the coming years, particularly in GPU sales. Meanwhile, Northland reiterated its Outperform rating and $175.00 price target for AMD stock, predicting robust double-digit growth in AI for 2025. Finally, Goldman Sachs adjusted its price target on shares of AMD to $125 from $129 while reaffirming a Neutral rating on the stock. These are recent developments that provide insight into the varying perspectives on AMD’s performance and future outlook.
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