Advanced Micro Devices (AMD) shares fell on Tuesday after KeyBanc Capital Markets cut its price target for the tech giant by 32%. The firm reduced its target to $150 from $220, citing incremental performance gains and stagnant growth prospects for AMD’s MI3XX series. KeyBanc analyst John Vinh said in a note to clients, “The price target reduction comes as AMD’s MI325 has shown only incremental performance gains compared to its predecessor, the MI300.”
Despite the challenges, KeyBanc maintains an Overweight recommendation for AMD stock.
The firm believes that while current AI demand has slowed, AMD is positioned to capture more market share with new product offerings. AMD shares are currently trading around $117, down almost 8% this week and 35% over the past six months. KeyBanc has also revised its forecast for AMD’s 2025 data center GPU revenue down to $10 billion, attributing the adjustment to a higher proportion of low-margin SKUs and lackluster growth in the Embedded segment.
However, KeyBanc remains cautiously optimistic about the company’s future, expecting a revival with the release of AMD’s MI355 in the latter half of 2025.
KeyBanc reduces target on AMD
The firm anticipates better growth metrics for AMD beginning in fiscal 2026, maintaining a positive long-term outlook for the company.
In other news, Jefferies analyst Blayne Curtis sees more upside potential for Broadcom and Marvell Technology in the AI chip market compared to Nvidia. Curtis believes there are still opportunities in artificial intelligence, even as the trade reaches its “later innings.”
Curtis named Broadcom as a top pick due to its robust and growing customer base. He also expects AI-related stocks to outperform analog and semiconductor capital equipment names.
Despite another strong year for Nvidia, Curtis remains bullish on the company, noting that new product releases have historically been the opportune time to hold onto the stock. Nvidia’s Blackwell chip is set to launch this year. “Concerns about rumored Blackwell delays and the associated impact are overdone, and we still see Nvidia capturing the lion’s share of the exploding AI spend,” Curtis added.