Key takeout
- AMD shares fell on Thursday, with the chipmaker's stock being downgraded by Jeffries analysts.
- Analysts said they hope for a performance gap between AMD's latest offering and Nvidia's expansion.
- AMD shares have lost more than 40% of their value over the past 12 months.
Advanced Microdevice (AMD) stocks lost the ground on Thursday as Jefferies analysts downgraded the stock, predicting a widening performance gap between AMD's latest product and Nvidia (NVDA).
Analysts downgraded AMD's stock to “hold,” reducing its price target to $120 from its previous “buy” rating and $135 price target. This is well below the average analyst $139 target tracked by Visible Alpha, five of whom issued a “hold” rating compared to seven “buys” and one “sell” rating.
AMD shares fell nearly 4% in recent trading on Thursday, losing more than 40% of their value over the past 12 months.
Jefferies highlights Nvidia's “critical performance benefits”
Citing performance tests conducted on three open source artificial intelligence (AI) models in recent weeks, Jefferies writes that Nvidia's H200 graphics processing unit (GPU) has a “significant performance advantage” over AMD's MI300X, and expects the gap to be “increased even further” in the Nvidia's Rubin and Blackwell lines.
Nvidia's GPU “overpers AMD with a wide margin” in tests by most analysts. Despite AMD's products have some advertised benefits, such as higher memory bandwidth, they “do not bring about superior real-world performance,” analysts write.
They also said that “expectations for increased competition” from Intel (INTC) contributed to the downgrade as they believe Intel could have “a rather competitive chip” under the new CEO next year.
