Advanced Micro Devices (AMD) faced a decline in its stock following its Advancing AI event, which analysts deemed underwhelming for investors. The company’s share price dropped 4% on Thursday after it introduced its latest AI chips without raising its financial outlook or announcing any new partnerships, expectations that some investors had hoped for.
Despite this, analysts from Jefferies remain optimistic about AMD’s growth potential, stating that strong demand for AI chips could still lead to gains for the stock. While AMD presented several new AI products, investors were reportedly hoping for more definitive signs of competition with Nvidia (NVDA) and the announcement of new customers. They were also looking for an increase in AI guidance, possibly to $5 billion, which may now be deferred until the company’s earnings report.
On Friday, AMD shares partially recovered, gaining over 2%. Analysts from Bank of America noted that AMD’s latest GPU, the Instinct MI325X, is still a year behind Nvidia’s latest Blackwell, with no immediate catalysts to shift the market dynamics. Jefferies analysts expect that AMD’s MI350, set to release next year, could be more competitive against Nvidia’s offerings, although they indicated that AMD is currently trailing behind Nvidia.
Nonetheless, Jefferies has maintained a “buy” rating on AMD with a price target of $190, reflecting a potential increase of more than 13% from its recent closing price of $167.89. Similarly, Bank of America retains its “buy” rating with a price target of $180. Overall, approximately three-quarters of analysts monitored by Visible Alpha maintain “buy” or equivalent ratings for AMD, with a consensus target of $192.13.