The share price of semiconductor giant Advanced Micro Devices (NASDAQ: AMD) continues to experience a challenging start to 2025, casting doubt on its ability to mount significant competition against industry leaders such as Nvidia (NASDAQ: NVDA).
In the last trading session, AMD ended the day down 4.76%, closing at $116.04. On a year-to-date basis, the equity has plunged over 5%.
Despite the strong momentum in the artificial intelligence (AI) chips market over the past year, AMD has failed to capitalize, declining more than 20% during this period.
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Following its latest price movement, AMD has hit a 14-month low. To this end, financial market analysis platform Barchart likened the plunge to “falling off a cliff” in an X post on January 11.
AMD stock fundamentals
For investors, a critical question now emerges: does this steep decline represent a buying opportunity or a warning signal of further losses? In coming up with the right investment decision, it is worth noting that AMD’s challenges extend beyond its stock price.
The company has faced a string of bearish news in a market where Nvidia is excelling with groundbreaking product launches, and Wall Street analysts are issuing mixed sentiments regarding the technology company.
For instance, Goldman Sachs recently downgraded AMD from “Buy” to “Neutral” and slashed its price target from $175 to $129. Analyst Toshiya Hari expressed concerns about AMD’s competitive position, particularly with Nvidia’s dominance in the chip sector.
Similarly, HSBC analyst Frank Lee downgraded AMD from “Buy” to “Reduce,” lowering the price target from $200 to $110. Lee cited AMD’s less competitive roadmap in the AI GPU market as a key reason for his downgrade.
Overall, AMD was viewed as a key competitor to Nvidia, but the company is seemingly struggling, especially in the AI market.
Nvidia’s dominance gives it a significant advantage, as developers prefer its semiconductors due to their established ecosystem. AMD’s AI chip, the Instinct MI325X, has seen weak demand, and the company may not release a leading AI server until 2025-2026. Meanwhile, Nvidia’s next-generation Blackwell chips have already been sold out.
Despite these bearish indicators, there is hope that the stock will likely rebound. The current low price of AMD could represent a strategic buying opportunity, particularly for those with a long-term investment horizon.
While some market analysts believe AMD could outperform Nvidia by 2025, others caution that its recovery will depend on its ability to innovate and compete effectively in the AI markets.
AMD technical outlook
From a technical analysis perspective, a stock trading expert with the pseudonym Paper Bozz stated in an X post on January 10 that AMD’s failed breakout attempt has now resulted in a breakdown, with the stock trapped in a bearish descending channel. The appearance of three consecutive bearish candlesticks suggests further downside in the near term.
The analyst highlighted that the stock may approach key support areas, with the following critical levels at $100 and $90. Conversely, resistance levels lie at $122 and $132.
The expert recommended waiting for the bottoming process to play out for bullish investors, particularly when negative news no longer significantly impacts the stock price.
The verdict on AMD
Investors now face a critical decision: is AMD’s sharp decline an opportunity to buy at a discount, betting on its recovery and future growth, or is it a warning sign of deeper issues that could lead to further declines?
With potential growth opportunities in AI and the presence of key technical support levels, AMD may still hold promise for investors willing to weather the volatility.
However, caution is warranted given the mixed signals from analysts and the risks associated with stocks experiencing significant declines.
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