After a range of new products unveiled at the ‘Advancing AI 2024’ event sparked optimism in early October, Advanced Micro Devices’ (NASDAQ: AMD) latest earnings report sent the company’s shares across a rough patch in the stock market.
Specifically, AMD stock has been following a downward trajectory for most of the last 30 days, and even the post-election euphoria failed to alter its course truly. Within the time frame, the semiconductor giant’s shares are down 13.09% to their latest closing price of $143.63 and another 0.32% in the Wednesday pre-market to their press time price of $143.17.
The gravity of AMD’s troubles is perhaps best showcased by the successes of the chipmaker’s biggest competitor, Nvidia (NASDAQ: NVDA), which is up 7.50% in the last 30 days.
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Wall Street remains confident AMD stock is a ‘Buy’
Despite the downtrend, Wall Street analysts have remained confident in Advanced Micro Devices’ future as the stock’s overall rating on the aggregate platform TipRanks stands at ‘strong buy.’
What is even more remarkable is that the lackluster earnings report and the subsequent decline failed to generate any ‘Sell’ ratings, and AMD is, at press time on November 13, seen as a ‘buy’ by 26 experts and a ‘Hold’ by 7.
The 12-month price targets are equally impressive – and, given the 30-day performance, equally surprising – as the semiconductor giant is expected to surge 30.22% to $187.04.
The Street high forecast predicts an even greater upside as it was set at $220 by KeyBank on the penultimate day of October. Furthermore, the lowest target of $150 – provided by Bernstein on the same day – would itself constitute an upside from the press time price.
November AMD stock revisions not as bullish
However, a closer examination of the ratings provides some answers as to why the outlook is so bullish. There have been relatively few revisions since the report was published, and those that were, though still having a positive skew, are nowhere near as optimistic.
On November 11, the China International Capital Corporation (CICC) initiated its coverage of AMD with a ‘neutral’ rating and a $155 price target, indicating the chipmaker’s recent troubles did impact the outlook.
Similarly, though Phillip Securities maintained their ‘buy’ rating on November 5, the revision also featured a forecast drop from $180 to $170.
The company explained that though AMD retains strong AI accelerator momentum and is rapidly gaining market share against Intel (NASDAQ: INTC) – a company so troubled that the U.S. government is rumored to be considering a bailout – gaming and embedded segments of the business are still struggling and therefore serve to temper the outlook.
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