On Tuesday, KeyBanc Capital Markets revised its price target for AMD (NASDAQ:AMD) stock, lowering it to $150 from the previous $220. Despite the reduction, the firm maintained its Overweight rating on the stock. Currently trading at $117.32, AMD shares have declined nearly 8% in the past week and 35% over the last six months, according to InvestingPro data.
The adjustment follows observations of underwhelming demand for AMD's MI325, which has shown only marginal performance enhancements over its predecessor, the MI300. Additionally, projections for the MI3XX series, particularly the China-specific MI308 SKU, suggest limited growth potential outside of this model.
KeyBanc analysts noted that their estimates for AMD's data center GPU revenues in 2025 have been trimmed to $10 billion, attributing this to a predicted higher proportion of sales from lower average selling price (ASP) China SKUs, as well as reduced expectations for the Embedded segment.
InvestingPro analysis shows AMD maintains a FAIR financial health score of 2.34, with revenue expected to grow 13% in FY2024. They had previously anticipated a partial recovery in the first half of 2025 but have adjusted forecasts due to the current outlook.
The firm's analysis points to a less than favorable AI outlook for AMD in the short term, although they remain optimistic about the company's prospects. The expectation is that the current slowdown in demand is a temporary setback. KeyBanc anticipates that AMD will regain a competitive edge with the release of the MI355 in the second half of the year, which is expected to drive more substantial growth in 2026.
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