Analysts Downgrade Microsoft and Amazon Ratings Amid AI Competition
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy AMD?
Source: Yahoo Finance
- Microsoft Downgrade: Stifel downgraded Microsoft from Buy to Hold, slashing the price target from $540 to $392 due to cloud supply constraints and rising investments, projecting a gross margin drop to about 63% for FY27, indicating increased near-term profitability pressure.
- Amazon Cloud Competitiveness Decline: DA Davidson downgraded Amazon to Neutral with a price target of $175, highlighting AWS's growth lagging behind Microsoft and Google, and suggesting Amazon may need to invest $50 billion to remain competitive in the AI-driven market.
- Tesla Robotaxi Potential: Wolfe Research forecasts Tesla's robotaxi platform could generate $250 billion in annual revenue by 2035, although near-term earnings may face pressure, the long-term ROI remains attractive, driven by autonomous vehicle adoption.
- AMD Long-Term Outlook Positive: Truist Securities advises to “buy the weakness” in AMD, projecting over $20 EPS by 2030 despite a choppy Q4, as strong demand in data center and AI sectors supports its long-term growth narrative.
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Analyst Views on AMD
Wall Street analysts forecast AMD stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AMD is 284.10 USD with a low forecast of 200.00 USD and a high forecast of 377.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
36 Analyst Rating
27 Buy
9 Hold
0 Sell
Strong Buy
Current: 192.500
Low
200.00
Averages
284.10
High
377.00
Current: 192.500
Low
200.00
Averages
284.10
High
377.00
About AMD
Advanced Micro Devices, Inc. is a global semiconductor company. The Company is focused on high-performance computing, graphics and visualization technologies. Its segments include Data Center, Client and Gaming, and Embedded. Data Center segment includes artificial intelligence (AI) accelerators, microprocessors (CPUs) for servers, graphics processing units (GPUs), accelerated processing units (APUs), data processing units (DPUs), Field Programmable Gate Arrays (FPGAs), smart network interface Cards (SmartNICs) and Adaptive system-on-Chip (SoC) products for data centers. Client and Gaming segment includes CPUs, APUs, chipsets for desktops and notebooks, discrete GPUs, and semi-custom SoC products and development services. Embedded segment includes embedded CPUs, GPUs, APUs, FPGAs, system on modules (SOMs), and Adaptive SoC products. It markets and sells its products under the AMD trademark. Its products include AMD EPYC, AMD Ryzen, AMD Ryzen PRO, Virtex UltraScale+, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
AMD Reports Strong Q4 Growth and Positive 2026 Guidance
- China Market Contribution: AMD's Q4 sales of $390 million in GPUs to China significantly boosted results, although management forecasts only $100 million in revenue for Q1, indicating potential volatility in future sales from this dynamic market.
- Data Center Revenue Growth: AMD's data center revenue surged 39% year-over-year to $5.4 billion, driven by record CPU and GPU sales, highlighting strong demand in the AI sector, with eight of the ten largest AI companies now utilizing its GPUs.
- Client and Gaming Segment Performance: Revenue from the client and gaming segments rose 34% and 50% respectively, totaling $3.9 billion, although the company anticipates a meaningful decline in semi-custom revenue in 2026, which could impact future growth potential.
- Overall Financial Performance: AMD's total revenue for Q4 climbed 34% year-over-year to $10.27 billion, with gross margin increasing to 54%, and adjusted earnings per share rising 40% to $1.53, surpassing market expectations and demonstrating robust performance amid high investor expectations.
See More
Analysis of Semiconductor ETF Investment Potential
- Significant Historical Returns: The iShares Semiconductor ETF has delivered a remarkable 1,150% return over the past decade, which is four times higher than the S&P 500, highlighting the long-term investment value of the semiconductor industry and attracting more investor interest.
- Key Holdings Performance: Micron, AMD, and Nvidia account for 23.6% of the ETF's portfolio value, with Micron achieving a staggering 3,690% return, indicating their crucial role in driving the ETF's performance.
- Future Growth Potential: By 2030, data center operators are expected to spend $4 trillion annually on AI infrastructure, presenting a massive market opportunity for the semiconductor industry, particularly for companies like Nvidia, AMD, and Micron, whose demand will continue to rise.
- Investment Return Projections: Investing $500 monthly in the iShares Semiconductor ETF, assuming a 12.2% annual return, could potentially reach $1 million in 25 years, demonstrating the ETF's sustainable growth potential in the future.
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Analysts Downgrade Microsoft and Amazon Ratings Amid AI Competition
- Microsoft Downgrade: Stifel downgraded Microsoft from Buy to Hold, slashing the price target from $540 to $392 due to cloud supply constraints and rising investments, projecting a gross margin drop to about 63% for FY27, indicating increased near-term profitability pressure.
- Amazon Cloud Competitiveness Decline: DA Davidson downgraded Amazon to Neutral with a price target of $175, highlighting AWS's growth lagging behind Microsoft and Google, and suggesting Amazon may need to invest $50 billion to remain competitive in the AI-driven market.
- Tesla Robotaxi Potential: Wolfe Research forecasts Tesla's robotaxi platform could generate $250 billion in annual revenue by 2035, although near-term earnings may face pressure, the long-term ROI remains attractive, driven by autonomous vehicle adoption.
- AMD Long-Term Outlook Positive: Truist Securities advises to “buy the weakness” in AMD, projecting over $20 EPS by 2030 despite a choppy Q4, as strong demand in data center and AI sectors supports its long-term growth narrative.
See More
AMD Stock Rating Updates and Future Outlook
- Rating Adjustments: UBS lowered AMD's price target from $330 to $310 while maintaining a Buy rating, highlighting AMD's outperformance against peers like Broadcom and Nvidia in 2023, indicating strong market competitiveness.
- Earnings Outlook: Despite a $1 billion cut in the gaming business, analysts believe AMD's CPU and GPU fundamentals remain strong, with projections of over $11 EPS by 2027 and more than $15 by 2028, showcasing long-term growth potential.
- Truist Rating Upgrade: Truist raised AMD's price target from $277 to $283, keeping a Buy rating and recommending investors buy on weakness, emphasizing the strength of the company's long-term growth narrative.
- Market Positioning: As a global semiconductor company focused on high-performance computing and graphics technologies, AMD's innovations drive the future of data centers, embedded systems, gaming, and PC markets, although some AI stocks may offer greater upside potential.
See More
Tech Stocks Plummet Amid AI Fatigue and Value Rotation
- Tech Stock Decline: Over the past three months, technology stocks have been on a downward trend, with significant losses among major players in the last week alone, indicating a shift in investor sentiment from growth to value stocks amid increasing volatility.
- Market Performance Comparison: Since Halloween, the Russell 1000 Value index has risen by 8.4%, while the tech-heavy Russell 1000 Growth index has fallen by 3.7%, reflecting a growing preference for value stocks as investors exhibit fatigue towards growth stocks.
- Microsoft Earnings Impact: Following Microsoft's fiscal second-quarter results that exceeded Wall Street expectations, the stock plummeted 11% in a single day due to signs of slowing cloud revenue, marking the largest drop since March 2020 and highlighting the market's sensitivity to tech stock performance.
- Concerns Over AI Technology: Growing concerns about AI technology potentially disrupting the software industry have led to a nearly one-third decline in the IGV Software index since its September peak, illustrating investor caution regarding the future of the tech sector and its economic implications.
See More
AMD Forecasts Accelerating Data Center Revenue Growth
- Data Center Revenue Outlook: AMD anticipates annual revenue growth exceeding 60% in the data center segment over the next three to five years, supported by a 39% revenue increase in Q4, highlighting the company's robust performance in server CPUs and data center GPUs.
- Importance of AI Accelerators: As the AI industry shifts towards more complex agentic workloads, AMD's MI400 series chips and Helios solutions will be crucial for driving growth, while the resurgence of CPUs will significantly enhance the company's performance.
- Strong Market Demand: AMD expects the server CPU market to achieve strong double-digit growth in 2026; however, despite increasing supply capacity to meet demand, CPUs may still become a bottleneck for AI infrastructure providers.
- Enhanced Competitive Advantage: AMD continues to gain market share in the server CPU market, and despite competition from Intel, the expanding market will allow AMD's EPYC server CPUs to drive strong growth in the data center business.
See More
AMD Reports Strong Q4 Growth and Positive 2026 Guidance
- China Market Contribution: AMD's Q4 sales of $390 million in GPUs to China significantly boosted results, although management forecasts only $100 million in revenue for Q1, indicating potential volatility in future sales from this dynamic market.
- Data Center Revenue Growth: AMD's data center revenue surged 39% year-over-year to $5.4 billion, driven by record CPU and GPU sales, highlighting strong demand in the AI sector, with eight of the ten largest AI companies now utilizing its GPUs.
- Client and Gaming Segment Performance: Revenue from the client and gaming segments rose 34% and 50% respectively, totaling $3.9 billion, although the company anticipates a meaningful decline in semi-custom revenue in 2026, which could impact future growth potential.
- Overall Financial Performance: AMD's total revenue for Q4 climbed 34% year-over-year to $10.27 billion, with gross margin increasing to 54%, and adjusted earnings per share rising 40% to $1.53, surpassing market expectations and demonstrating robust performance amid high investor expectations.
See More
Analysis of Semiconductor ETF Investment Potential
- Significant Historical Returns: The iShares Semiconductor ETF has delivered a remarkable 1,150% return over the past decade, which is four times higher than the S&P 500, highlighting the long-term investment value of the semiconductor industry and attracting more investor interest.
- Key Holdings Performance: Micron, AMD, and Nvidia account for 23.6% of the ETF's portfolio value, with Micron achieving a staggering 3,690% return, indicating their crucial role in driving the ETF's performance.
- Future Growth Potential: By 2030, data center operators are expected to spend $4 trillion annually on AI infrastructure, presenting a massive market opportunity for the semiconductor industry, particularly for companies like Nvidia, AMD, and Micron, whose demand will continue to rise.
- Investment Return Projections: Investing $500 monthly in the iShares Semiconductor ETF, assuming a 12.2% annual return, could potentially reach $1 million in 25 years, demonstrating the ETF's sustainable growth potential in the future.
See More
Analysts Downgrade Microsoft and Amazon Ratings Amid AI Competition
- Microsoft Downgrade: Stifel downgraded Microsoft from Buy to Hold, slashing the price target from $540 to $392 due to cloud supply constraints and rising investments, projecting a gross margin drop to about 63% for FY27, indicating increased near-term profitability pressure.
- Amazon Cloud Competitiveness Decline: DA Davidson downgraded Amazon to Neutral with a price target of $175, highlighting AWS's growth lagging behind Microsoft and Google, and suggesting Amazon may need to invest $50 billion to remain competitive in the AI-driven market.
- Tesla Robotaxi Potential: Wolfe Research forecasts Tesla's robotaxi platform could generate $250 billion in annual revenue by 2035, although near-term earnings may face pressure, the long-term ROI remains attractive, driven by autonomous vehicle adoption.
- AMD Long-Term Outlook Positive: Truist Securities advises to “buy the weakness” in AMD, projecting over $20 EPS by 2030 despite a choppy Q4, as strong demand in data center and AI sectors supports its long-term growth narrative.
See More
AMD Stock Rating Updates and Future Outlook
- Rating Adjustments: UBS lowered AMD's price target from $330 to $310 while maintaining a Buy rating, highlighting AMD's outperformance against peers like Broadcom and Nvidia in 2023, indicating strong market competitiveness.
- Earnings Outlook: Despite a $1 billion cut in the gaming business, analysts believe AMD's CPU and GPU fundamentals remain strong, with projections of over $11 EPS by 2027 and more than $15 by 2028, showcasing long-term growth potential.
- Truist Rating Upgrade: Truist raised AMD's price target from $277 to $283, keeping a Buy rating and recommending investors buy on weakness, emphasizing the strength of the company's long-term growth narrative.
- Market Positioning: As a global semiconductor company focused on high-performance computing and graphics technologies, AMD's innovations drive the future of data centers, embedded systems, gaming, and PC markets, although some AI stocks may offer greater upside potential.
See More
Tech Stocks Plummet Amid AI Fatigue and Value Rotation
- Tech Stock Decline: Over the past three months, technology stocks have been on a downward trend, with significant losses among major players in the last week alone, indicating a shift in investor sentiment from growth to value stocks amid increasing volatility.
- Market Performance Comparison: Since Halloween, the Russell 1000 Value index has risen by 8.4%, while the tech-heavy Russell 1000 Growth index has fallen by 3.7%, reflecting a growing preference for value stocks as investors exhibit fatigue towards growth stocks.
- Microsoft Earnings Impact: Following Microsoft's fiscal second-quarter results that exceeded Wall Street expectations, the stock plummeted 11% in a single day due to signs of slowing cloud revenue, marking the largest drop since March 2020 and highlighting the market's sensitivity to tech stock performance.
- Concerns Over AI Technology: Growing concerns about AI technology potentially disrupting the software industry have led to a nearly one-third decline in the IGV Software index since its September peak, illustrating investor caution regarding the future of the tech sector and its economic implications.
See More
AMD Forecasts Accelerating Data Center Revenue Growth
- Data Center Revenue Outlook: AMD anticipates annual revenue growth exceeding 60% in the data center segment over the next three to five years, supported by a 39% revenue increase in Q4, highlighting the company's robust performance in server CPUs and data center GPUs.
- Importance of AI Accelerators: As the AI industry shifts towards more complex agentic workloads, AMD's MI400 series chips and Helios solutions will be crucial for driving growth, while the resurgence of CPUs will significantly enhance the company's performance.
- Strong Market Demand: AMD expects the server CPU market to achieve strong double-digit growth in 2026; however, despite increasing supply capacity to meet demand, CPUs may still become a bottleneck for AI infrastructure providers.
- Enhanced Competitive Advantage: AMD continues to gain market share in the server CPU market, and despite competition from Intel, the expanding market will allow AMD's EPYC server CPUs to drive strong growth in the data center business.
See More
