Advanced Micro Devices (AMD) faced disappointment from investors during its Advancing AI event on Thursday as it unveiled new AI chips without raising its guidance or announcing new partnerships. Following the event, AMD shares dropped 4%, although they recovered slightly with a gain of over 2% on Friday.
Analysts from Jefferies indicated that despite the initial setback, they remain optimistic about AMD’s growth prospects. They noted that while investors expected clearer competition signs with Nvidia and a potential increase in AI guidance to $5 billion, the new AI products still have the potential to generate gains due to strong demand.
Bank of America analysts pointed out that AMD’s new Instinct MI325X GPU lags significantly behind Nvidia’s Blackwell, with no immediate catalysts to shift the competitive landscape. However, Jefferies believes that AMD’s upcoming MI350 chip next year may enable it to compete more effectively with Nvidia.
Jefferies continues to maintain a “buy” rating for AMD, with a price target of $190, representing a more than 13% upside from Friday’s closing price of $167.89. Bank of America also issued a “buy” rating with a price objective of $180. As of Friday, around three-quarters of the analysts tracked by Visible Alpha rated AMD as a “buy,” with a consensus target of $192.13.