Prior to today’s after-hours fourth quarter financial report, Advanced Micro Devices (NASDAQ: AMD) Stocks were falling. The cause appears to have been an analyst downgrade.
As a result, AMD stock fell 2.9% as of 3:06 p.m. ET.
Wall Street softens view on AMD
AMD’s stock price has risen significantly over the past year on hopes that the company will capitalize on the artificial intelligence (AI) boom. However, recent performance has been hampered by the broader economic downturn in the global economy. Semiconductor department.
After a dramatic rise in stock prices, raymond james has tempered his enthusiasm for AMD, lowering his investment decision from “strong buy” to “outperform with a $195 price target.”
Analyst Srini Pajuri said the valuation of the chip stock was the reason for the downgrade, and that the current valuation assumes a 20% unit share for the new MI300 AI accelerator, which Pajuri said makes a bullish case. He said it was close.
The analyst also noted that rapid market share gains are less common in the data center sector, and AMD is likely to face pushback from competitors. Nvidia Once the share reaches 20%.
What’s next for AMD?
All eyes will be on AMD’s fourth quarter financial report, which will be released after the market closes today. Investors will be keeping an eye on the latest information on MI300, which the company announced at a well-received event last month.
Analysts expect the quarter’s results to be subdued as the PC market continues to slow. Consensus is for revenue to rise 0.8% to $5.64 billion, and Wall Street ultimately expects earnings to edge up to $0.71 from $0.69.
Investors will also be paying close attention to the company’s guidance and AI commentary. The stock could move significantly in either direction with this update, as the advent of generative AI has instilled high expectations for the stock.
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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool has Disclosure policy.
Why Advanced Micro Devices stock fell today Originally published by The Motley Fool
