Shares of semiconductor company Advanced Micro Devices (AMD) plummeted today following a downgrade by Goldman Sachs five-star analyst Minya Zhang. Analysts at the company downgraded AMD stock from a buy rating to a neutral rating on Friday.
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Hari’s downgrade of AMD stock comes with a lower price target. Goldman Sachs analysts lowered the company’s price target from $175 to $125 per share. Despite this reduction, the price target still indicates that AMD stock has a chance of increasing by 12.11% over the next year.
AMD investors are not happy with today’s downgrade and price target reduction, with the stock down 5.48% at the time of writing. This is based on a decline of 22.26% over the past 52 weeks.
What’s behind the AMD downgrade?
Hari worries that competition from AMD’s rivals will weigh on the company’s business. One of the top companies is Arm, which attracts customers with its custom central processing units. Additionally, the company is concerned about increasing competition in the accelerated computing market.
Despite these warnings, Goldman Sachs analysts suggest some positives for AMD. This includes expectations that the company will continue to take share of the x86-based computing market from Intel (INTC) with its PC and server products.
Another factor weighing on AMD stock today is the December jobs report. This was stronger than expected, reducing the likelihood of a rate cut in 2025. As a result, the stock market fell today, with tech stocks leading the decline. This makes sense, since many stocks fit into the category of growth stocks, which benefit from low interest rates.
Should you buy, sell, or hold AMD stock?
Turning to Wall Street, the analyst consensus rating for Advanced Micro Devices is a Moderate Buy, based on 23 buys, 9 holds, and 1 sell over the past three months. Accordingly, the average price target is $179.84, with an expected high of $250 and a low of $110. This means AMD stock could rise by 56.41%.
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