- Advanced Micro Devices‘s (AMD) stock fell over 3% to $105.55 in early trading Thursday after Jefferies downgraded it from ‘Buy’ to ‘Hold,’ cutting the price target from $135 to $120 due to weak AI progress and rising competition from Intel (INTC).
- Jefferies’ tests show Nvidia’s H200 outperforms AMD’s MI300x in AI tasks, highlighting Nvidia’s (NVDA) superior software advantage, which could widen the gap as system performance gains importance.
- The firm sees AMD lagging in the AI market, with overly optimistic Wall Street estimates and a tough road ahead to match Nvidia and fend off Intel’s challenge.
Advanced Micro Devices Inx (AMD), a major player in the tech world with a market value of $178.56 billion, saw its stock slip over 3% to a low of $105.55 during early trading on Thursday. This drop came after Jefferies, a well-known financial firm, shifted its stance on AMD, moving it from a “Buy” to a “Hold” rating and trimming its price target from $135 to $120. The downgrade reflects some tough realities for AMD, particularly in the fast-moving field of artificial intelligence, where Jefferies says the company isn’t gaining much ground and faces stiff competition, especially from Intel (INTC).
Jefferies pointed out that AMD’s MI300x, a key product meant to take on the big dogs in AI, isn’t measuring up to Nvidia’s H200 in real-world performance tests. Nvidia (NVDA), a leader in the graphics processing unit space, seems to have a serious edge thanks to its well-developed software that makes its hardware run more efficiently. According to Jefferies’ research, when they compared how these chips handle a variety of common AI tasks, Nvidia’s offering came out way ahead. This gap isn’t just a small hiccup—it’s a sign that AMD has a long road ahead to catch up, especially as the industry starts caring more about overall system performance rather than just raw hardware power.
The firm also thinks Wall Street’s expectations for AMD are a bit too rosy. Analysts out there might be overestimating how well the company will do, particularly as Intel ramps up its game and Nvidia keeps pulling further ahead in AI. Jefferies believes this competitive pressure, combined with AMD’s struggles to make a dent in the AI market, justifies the more cautious outlook. With shares down 41% year-over-year, investors are clearly feeling the weight of this news, even though the $120 price target still suggests some room to grow from today’s dip. For AMD, the challenge is clear: it needs to close the gap with Nvidia’s software strengths and fend off Intel’s advances, or risk losing more ground in a tech race that’s only getting faster.
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