Goldman Sachs analyst Toshiya Hari has revised his stance on Advanced Micro Devices (NASDAQ: AMD), downgrading the stock from Buy to Neutral and slashing the price target from $175 to $129.
In pre-market trading, AMD is priced at $119.67, reflecting a 1.78% decline. The new target suggests a modest upside from current levels, albeit underscored by caution rather than confidence in the near-term trajectory.
Goldman Sachs downgrades AMD shares
In his commentary, Hari maintained a nuanced perspective. While acknowledging AMD’s continued ability to wrest market share from Intel in x86-based computing across PCs and traditional servers, he articulated mounting concerns about the competitive landscape.
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The ascendancy of Arm-based custom CPUs and intensifying competition in accelerated computing could, in his view, stymie AMD’s revenue growth relative to its peers, inflate operating expenses, and suppress its valuation multiples.
The downgrade also reflects AMD’s comparative underperformance since its addition to Goldman Sachs’ Buy list on November 4, 2020. Despite a 50% price appreciation, this falls short of the S&P 500’s concurrent 72% advance. Hari attributed this discrepancy to subdued demand for consumer PCs, slower-than-anticipated growth in data center GPU sales, and persistent weakness across traditional end markets.
The outlook suggests that AMD may remain range-bound until it reestablishes market confidence in its growth narrative and margin prospects. Although AMD’s innovation in x86-based solutions remains a strategic advantage, concerns about competitive encroachment and cost pressures loom large.
“We now expect the stock to remain range-bound until the market regains confidence in AMD’s future growth and margin trajectory,” the analyst noted.
AMD stock technical analysis
AMD’s position at the lower end of its 52-week range highlights its underperformance relative to broader market trends. The S&P 500, by contrast, is positioned near the upper end of its range, signaling that AMD has lagged behind broader indices.
Over the past month, the stock has oscillated between $117.90 and $132.32, with its current price nestled near the midpoint—a precarious position, as it approaches significant resistance at $129.55, a key horizontal threshold on the daily chart.
On the downside, technical support emerges between $118.88 and $120.22, shaped by converging trend lines across multiple time frames.
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