Truist Securities has lowered its price target for Advanced Micro Devices (NASDAQ: AMD) to $111 from $130, maintaining a Hold rating on the stock.
This adjustment comes after AMD’s latest quarterly results, which, while generally positive, are overshadowed by several complex factors affecting the company’s outlook.
Key Reasons for the Price Target Cut
- China Market Exit: AMD’s decision to exit the China market is expected to reduce Datacenter Accelerator revenues in the second and third quarters of 2025, impacting overall growth prospects.
- Inventory Write-Down: An inventory write-down is anticipated in Q2, which could further pressure near-term earnings.
- Mixed Segment Performance: While the Client segment is forecast to perform better due to a richer product mix, Truist remains cautious about AMD’s ability to ramp up new products like the MI350 (set for H2 2025) and the MI400 (expected in 2026) amid stiff competition.
- Valuation and EPS Revision: Truist’s new $111 target is based on a 20x multiple of projected 2026 EPS, which has been trimmed from $5.67 to $5.54. This multiple is notably lower than the 25x used for AMD’s datacenter peers, reflecting concerns about competitive positioning and execution.
- Stock Volatility: AMD shares have experienced a 34% decline over the past six months, despite the company’s strong fundamentals and robust financial health, highlighting market uncertainty.
Analyst and Market Context
Truist’s move follows a pattern of cautious analyst sentiment across Wall Street. While AMD’s recent quarter beat consensus on revenue ($7.44 billion) and earnings ($0.96 per share), and the company boasts a healthy balance sheet with minimal debt, doubts remain about near-term growth in key segments and the impact of global trade dynamics.
Other analysts have also trimmed their targets, with Northland now at $132, Evercore ISI at $126, and Jefferies at $100, all reflecting a more measured outlook on AMD’s competitive trajectory, especially in AI and datacenter markets.
Bottom Line
Truist’s price target cut to $111 underscores concerns about AMD’s ability to sustain momentum as it navigates product transitions, market exits, and inventory challenges. While AMD remains financially strong and continues to innovate, investors should expect continued volatility as the company works to execute its next phase of growth.