AMD Shares Fall Over 2% After HSBC Downgrade Amid AI GPU Market Challenges

AMD shares (NASDAQ:AMD) dropped more than 2% in pre-market trading as HSBC downgraded the stock from Buy to Reduce, cutting its price target sharply from $200 to $110. This downgrade stems from concerns regarding AMD’s competitiveness in the AI GPU sector and possible delays in its product launches.

HSBC identified weak demand for AMD’s MI325 GPU and potential hold-ups in the introduction of its AI rack solution as critical factors limiting the firm’s market position against Nvidia, a formidable competitor. The forecast for AMD’s fiscal 2025 AI GPU revenue has been significantly adjusted from $12.3 billion down to $8.1 billion, falling below market expectations.

With AMD’s stock already down 24% in the last three months, analysts warn of further declines ahead. Although the company’s product development roadmap appears on track, competition in the AI sector remains fierce, raising concerns about AMD’s long-term profitability.