What Happened?
Shares of computer processor maker AMD (NASDAQ:AMD) fell 5.2% in the morning session after the company received a double rating downgrade from HSBC. Analyst Frank Lee cut his rating from Buy to Sell and lowered the price target from $200 to $110 on concerns that AMD's competitive posture in the GPU market might not be as strong as initially anticipated. The analyst thinks the AI GPU growth for the first half of 2025 could decelerate due to weak demand for AMD's new MI325 GPU.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy AMD? Access our full analysis report here, it’s free.
What The Market Is Telling Us
AMD’s shares are quite volatile and have had 19 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 16 days ago when the stock gained 5.4% on the news that Rosenblatt's analysts named the stock a top AI pick for the first half of 2025. The firm has a Buy rating and a $250 price target, which implied a 100% share price upside. The analysts called out AMD's growing share in the CPU and GPU market and its robust pipeline of custom AI chips.
AMD is down 0% since the beginning of the year, and at $120.58 per share, it is trading 43% below its 52-week high of $211.38 from March 2024. Investors who bought $1,000 worth of AMD’s shares 5 years ago would now be looking at an investment worth $2,521.
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