Bank of America analyst Vivek Arya downgraded Advanced Micro Devices (AMD) to neutral from buy and cut his price target to $155, citing limited market share gain potential due to increased competition. The downgrade comes as cloud customers increasingly prefer custom chips over AMD’s products.
Arya pointed to Amazon’s recent preference for alternative custom chip providers, including NVDA, as a major headwind for AMD. Although AMD maintains a strong presence at Microsoft, Meta, and Oracle, its high costs for premium Blackwell products may limit share gains.
For 2025, Arya lowered his AI GPU forecast to $8 billion from $8.9 billion, expecting AMD to maintain a market share of around 4%. Shares have slipped 6% in 2024, but the stock still has a bullish outlook among analysts, with 44 out of 54 covering the chipmaker having a buy or strong buy rating and an average price target indicating upside of over 32%.
Source: https://www.cnbc.com/2024/12/09/bank-of-america-downgrades-amd-due-to-potential-market-share-losses.html