Given Intel's myriad of woes, many investors expected AMD to rapidly capitalize on its processor-driven momentum to start putting up some much-needed effective competition against NVIDIA in the AI GPU sphere. That eventuality, however, has yet to materialize, leading to an ephemeral disillusionment of sorts and prompting a major global bank to now go outright bearish on the stock's near-term prospects.
To wit, HSBC - which was the 07th largest bank by assets in a global categorization by S&P in 2024 - has now slashed its target for AMD's share price by 45 percent to $110 from an earlier target of $200, implying a further downside of ~11 percent from the chipmaker's current share price.
While noting the significant correction in AMD's share price that has already taken place, with the stock correcting by "24% in the past three months (versus -12% for the PHLX Semiconductor index)," HSBC analyst Frank Lee believes "further downside [for the stock] remains."
Lee thinks "AMD's AI GPU roadmap is less competitive than previously anticipated, limiting its penetration into the AI GPU market." Consequently, the bank sees reduced momentum for AMD in this stock price-critical arena:
"Specifically, we see downside to its 1H25 AI GPU momentum due to lukewarm demand for the MI325 GPU, as lower-spec HBM3e memory is expected, given Samsung’s ongoing struggles with ramping up its higher-spec HBM3e."
Lee does concede that AMD is slated to launch its new MI350 GPU in the second half of 2025, but notes that the chipmaker "likely won’t have an AI rack solution to compete with Nvidia’s NVL rack platform until late 2025 or early 2026, when we expect the MI400 to launch."
HSBC's latest note on AMD aligns with a growing chorus of downbeat commentaries that are beginning to populate Wall Street. For instance, Wolfe Research noted in December 2024 that "AMD won’t be in a position to guide AI for CY25 – which will in itself drive concerns."
Additionally, Bank of America (BofA) also recently flagged the rise of Arm-based vendors as a key concern for AMD's CPU market share, especially as the penetration of Arm-based server CPUs reached 7 percent in Q3'24 "vs. <5% in 2023 and ~1% in 2022."
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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