HSBC Slashes AMD Price Target But Declares It’s ’Still a Buy’ - Here’s Why
HSBC just cut AMD's price target—but insists the chipmaker remains a solid buy. Because on Wall Street, sometimes a 'downgrade' just means 'less ridiculously overpriced' rather than 'actually reasonably valued.'
The analyst move comes as semiconductor stocks face pressure from supply chain constraints and shifting demand patterns. Yet AMD's positioning in high-performance computing and data centers keeps the bulls optimistic.
Never mind that price targets often resemble random number generation—HSBC's trimmed target still suggests decent upside. Because in finance, lowering expectations is just another way to beat them later.
So while the number got smaller, the verdict didn't change: Buy. Proving once again that analyst ratings have more layers than a semiconductor wafer.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Even with the cut, Lee kept a Buy rating, pointing to AMD’s strong long-term positioning in both GPUs and CPUs. The analyst had upgraded AMD to Buy from Hold in July, when he argued the company was back in the AI race with stronger product momentum.
Why the Analyst Cut His Price Target on AMD
Lee acknowledged that AMD’s new MI355 GPU still has pricing power that could surprise the market. On the latest earnings call, management also highlighted a significant uplift from the earlierchip, reinforcing the case for higher-value products.
However, Lee now expects AMD to sell its GPUs at different price points depending on the customer, rather than assuming one standard price. As a result, he lowered his average selling price (ASP) forecast from $25,000 to $23,000 per unit. That change pushed down his 2026 AI GPU revenue estimate from $15.1 billion to $13.9 billion. Since his valuation model is tied to revenue and earnings, the revision directly led him to trim his price target to $185.
Importantly, Lee noted that his forecast is still about 20% above Wall Street consensus, meaning he believes most analysts continue to underestimate AMD’s pricing potential.
Testing Phase for MI400 Rack Solution
Lee also pointed to progress with the upcoming MI400 rack solution, which is now moving into testing at major cloud players. Companies including Meta (META), Microsoft (MSFT), Oracle (ORCL), and xAI are expected to report early results from these trials by late 2025 or early 2026.
By the first quarter of 2026, Lee expects clearer order visibility, which could set the stage for stronger growth.
Long-Term Outlook Remains Strong
While Lee cut near-term pricing assumptions, he stressed that AMD remains in a solid position in the AI chip race. He expects continued adoption of the company’s GPU lineup and sees upside as new products gain traction with large customers.
Is AMD Stock a Buy or Sell Now?
Overall, Wall Street is cautiously optimistic on Advanced Micro Devices stock, with a Moderate Buy consensus rating based on 26 Buys and 11 Holds. The average AMD stock price target of $184.91 indicates 22.13% upside potential from current levels.
