Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the AI Stocks Investors Are Watching Closely. One of the biggest analyst calls on Thursday, September 4, was for Advanced Micro Devices.
Seaport downgraded the stock to “Neutral” from buy stating that its supply chain checks reveal slow progress with its artificial intelligence accelerator business.
The firm further revealed how AMD is struggling to grow orders from the many customers that it announced previously at its AI event.
AMD continues to be a viable competitor in the AI accelerator market. However, Seaport believes that it isn’t gaining meaningful share anytime soon.
“While the MI Series of accelerators has shown continued improvements, the market remains challenging with highly demanding customers. In particular, we are concerned that many of their headline customers have only purchased evaluation systems that are unlikely to convert into volume orders for at least one generation of the MI systems.”
“Elsewhere, we are concerned that their progress at customers like Microsoft and Meta, are attracting intense scrutiny as those companies re-evaluate their AI spending plans. Moreover, the company’s use of discounts and other support mechanisms has become more widespread. Finally, we think margins may come under pressure as the company may lose negotiating leverage with current HBM suppliers. While we think the company remains a viable long-term competitor in the AI Accelerator market, the timeframe for them achieving more meaningful share is further out. We downgrade to Neutral.”
Advanced Micro Devices, Inc. (NASDAQ:AMD) develops and sells semiconductors, processors, and GPUs for data centers, gaming, AI, and embedded applications.
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