Weaknesses at AMD Despite Optimistic Forecast: Analyst Expects Upswing by 2025

The stock of Advanced Micro Devices (AMD) came under pressure again on Monday, continuing the downward trend of the second half of the year. Nevertheless, a Wall Street analyst offers hope for the chip giant and sees more opportunities than risks in the future. Since its peak in late spring, the stock has fallen by about 45%, losing approximately $140 billion in market value. Concerns about ongoing supply chain issues dampen expectations for revenue growth in the three main business areas. The launch of the new AI chip MI300 was affected by similar problems, preventing AMD from gaining market share against its larger competitor Nvidia and smaller rivals like Broadcom and Marvell Technologies. Broadcom, in particular, scores this year with high demand for its specialized network chips. The Santa Clara-based group also manufactures ASIC chips used to accelerate large data volumes. Analyst Gus Richard from Northland rates AMD as one of his "top picks" for 2025 and confirmed a price target of $175 as well as the "outperform" rating. Richard's analysis highlights that AMD's AI strategy is shaped by its roadmap and advantages in total cost, while its server and client CPU products are competitive. He expects AMD to gain market share in AI GPUs, server CPUs, and PC clients as headwinds from the embedded and gaming segments subside. Richard's forecast for AMD's AI revenue in 2025 is about $9.5 billion, an increase of 83% compared to 2024. This figure could be conservative, as the MI325X chip reaches the market and successfully competes with Nvidia's H200 in the early months of the year. In the non-AI area of the data center segment, Richard also expects a 26% increase to $7.7 billion, with the Turin chips outperforming Intel's Granite Rapids according to his assessment. In the personal computer sector, Richard also sees potential for AMD's market share gains against Intel, benefiting from a possibly underestimated renewal rate of the PC market.