synopsis

Analysts who lowered price targets expressed concerns over near-term export risk and product mix while maintaining bullish long-term views tied to AI and AMD’s competitive position in the PC and server markets.

Analysts delivered mixed calls on Advanced Micro Devices (AMD) following its first-quarter earnings beat and a warning of a $1.5 billion hit to revenue for the fiscal year 2025 from U.S. chip restrictions on China.

Despite the division on Wall Street, AMD’s stock rose 1.6% in pre-market trade on Wednesday. 

The company posted earnings per share of $0.96, beating the consensus estimate of $0.94. Revenue reached $7.44 billion, exceeding forecasts of $7.13 billion. 

For the second quarter (Q2), AMD guided to $7.4 billion in revenue and a gross margin of 43% despite projecting a $700 million hit from newly expanded U.S. export controls. The company said the total revenue impact from the restrictions could reach $1.5 billion this fiscal year.

Bank of America (BofA) upgraded AMD to ‘Buy’ from ‘Neutral’ and raised its price target to $120 from $105, citing confidence in the company’s growth prospects and noting that its Q2 revenue guide was 10% above the firm’s expectations. BofA said that despite China headwinds, AMD could deliver over 20% topline growth in 2025 and 2026.

Conversely, other analysts took a more cautious stance, pointing to export risks and an imbalanced product mix as reasons for lowering their price targets.

Roth Capital and Piper Sandler maintained positive ratings but lowered their price targets to $125 from $140. 

Meanwhile, Morgan Stanley reduced its target to $121 from $137, flagging an “underwhelming” sales mix that leaned more heavily on client chips versus higher-margin data center products. Still, it said AMD delivered a “strong quarter” and called the guidance “impressive” given the scale of the China headwind.

UBS’s Timothy Arcuri also trimmed his price target to $150 from $155 but kept a ‘Buy’ rating on the shares. He highlighted that AMD’s first quarter (Q1) results were at the high end of expectations. 

Arcuri also said revenue guidance implies the company is gaining share from Intel (INTC), particularly in higher-end PC segments. 

AMD’s Q1 data center revenue rose 57% year-on-year (YoY) to $3.7 billion, driven by demand for Epyc CPUs and Instinct GPUs. The client and gaming segment increased 28% to $2.9 billion, with laptop and PC chip sales jumping 68% due to strong uptake of the Zen 5 line.

CEO Lisa Su said export controls remain a headwind but are “more than offset by the powerful tailwinds from our leadership product portfolio.”

AMD’s stock has fallen nearly 20% year-to-date, slipping more than 35% over the 12 months.

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