Shares of chipmaker Superior Micro Units (NASDAQ: AMD) fell 5.4% in Monday buying and selling, as of two p.m. ET.
The semiconductor inventory fell right this moment on the heels of an analyst downgrade from a Wall Avenue sell-side analyst, capping off a troublesome few buying and selling days for the factitious intelligence (AI) hopeful.
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As we speak, Financial institution of America analyst Vivek Arya downgraded AMD to impartial from purchase, whereas reducing his worth goal from $180 to $155.
The timing of right this moment’s downgrade was additionally noteworthy. On Friday, AMD’s inventory additionally declined following a press release from an Amazon government that Amazon Internet Providers (AWS), the biggest cloud platform on the planet, was “not but seeing” demand for AMD’s MI300 roster of AI GPUs.
AMD had hoped to make inroads within the exploding AI market, however not less than this quote suggests the key clouds are both shopping for chief Nvidia‘s most superior chips or merely making their very own in-house designed coaching chips at decrease value. Simply final week, Amazon stated its Trainium2 chips had been obtainable, and that it was constructing a “supercluster” with stated Trainium chips for outdoor prospects and AI start-up Anthropic, during which Amazon has invested.
Apparently, BofA sees the rise of cheaper internally made chips from all cloud suppliers, in addition to Nvidia’s upcoming Blackwell chip, as crowding out the chance for AMD in AI. Moreover, Arya famous some have projected tender PC demand within the first half of 2025, which may additional weigh on AMD outcomes.
AMD has been a inventory market darling for a variety of years, however that has pushed its valuation as much as 122 instances earnings and almost 30 instances subsequent yr’s projections. With expectations so excessive, it is maybe not shocking to see the inventory react this harshly on right this moment’s downgrade.
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