AMD Stock Faces Challenges After Bank of America Downgrade

Advanced Micro Devices (AMD) has encountered significant challenges following a downgrade of its stock rating by Bank of America from ‘buy’ to ‘neutral’. This decision is largely driven by weak demand for AMD’s artificial intelligence chips among Amazon Web Services customers, as well as heightened competition from Nvidia.

The downgrade has led to a notable decline in AMD’s shares, with the stock closing almost 6% lower. This reflects increased concerns about the company’s growth potential in the artificial intelligence sector and ongoing difficulties in the personal computer market. The analyst has also reduced the price target for AMD from $180 to $155, indicating a cautious outlook for 2025 and potential market share losses in the artificial intelligence segment.

As of the last trading session, AMD’s stock price fluctuated by 4.43%, ranging from a low of $130.11 to a high of $135.77. Over the last 10 days, the price has declined in six of those days, resulting in an overall drop of 5.41%. Despite the falling prices, trading volume increased by 22 million shares on the last day, which could be an early warning sign suggesting a slight increase in risk over the next couple of days.

In the past 52 weeks, the highest price of the stock reached $227, while the lowest was $121.18. Currently, the price stands at $132.42, which is significantly below the 52-week high and the all-time high for the stock.

The recent appointment of Tim Keating as senior vice president for government relations and regulatory affairs could be a strategic move, but the immediate market reaction highlights the urgency for AMD to tackle these pressing challenges. Unless AMD can adapt and innovate to enhance its competitive position, it may face difficulties in regaining investor confidence.