Despite the semiconductor industry being a major beneficiary of the ongoing artificial intelligence (AI) boom, with Nvidia (NASDAQ: NVDA) adding more than $2 trillion to its market capitalization and Broadcom (NASDAQ: AVGO) seeing its valuation rocket above $1 trillion in 2024, not all chipmaker stocks enjoyed the upside.
While much has been said about the decline of Intel (NASDAQ: ITNC), Advanced Micro Devices (NASDAQ: AMD) did not perform well either, and AMD shares are down 27.15% in the last 12 months to their press time price of $122.52.
Given the performance, it may come as no surprise that Citi (NYSE: C) downgraded its price target for the chipmaker, setting its sights at $175 instead of the previously assigned $200. What is somewhat more interesting is that, despite the reduced forecast, the ganking giant still views AMD as a ‘buy.’
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Citi’s AMD stock price target revision explained
The mixed revision can perhaps be explained by Citi’s own assessment of the situation. Specifically, AMD is likely to see a slowdown in the coming months due to ‘sluggish demand’ in the personal computer (PC), industrial, and automotive markets.
On the other hand, City estimates that business will remain strong on the AI side of things. Such a setup would hardly be surprising as major technology stocks accounted for the lion’s share of gains in the 2024 stock market.
The top 10 big tech companies saw their collective market capitalization increase by approximately $6.6 trillion within the 52 weeks, and the top AI stock surged by $8.7 trillion since the boom started with the release of ChatGPT.
Wall Street remains bullish on AMD stock despite reduced upside potential
Finally, Citi’s reevaluation of AMD also follows something of a trend. As Finbold reported on January 16, the semiconductor giant retains an overall ‘moderate buy’ rating on the stock analysis platform TipRanks with price target downgrades paired with a positive recommendation being no rare sight.
The most dramatic example of this was provided by KeyBank, which reduced the forecast by a massive $70 from $220 to $150 despite keeping a ‘buy’ rating for Advanced Micro Devices shares.
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