Wall Street has been lowering ratings, what happened to AMD?

AMD may be losing its competitive edge... Recently, multiple institutions on Wall Street have downgraded AMD's rating, raising concerns about the future development of this chip giant.

On Friday, Wolfe Research analyst Chris Caso downgraded AMD's stock rating from "Buy" to "Peer Perform" and canceled the previous target price of $210.

Not only Wolfe Research, but Goldman Sachs and HSBC have also recently downgraded AMD's rating, with Goldman Sachs lowering AMD's rating from "Buy" to "Neutral," and HSBC downgrading from "Buy" to "Reduce."

These rating adjustments reflect Wall Street's concerns about the challenges AMD faces in the short term.

Chris Caso stated that the downgrade was primarily due to lowered expectations for AMD's data center GPU revenue. Although GPUs are key chips in the artificial intelligence field, Caso believes that AMD's data center GPU business is "underperforming."

As a result, Wolfe Research significantly lowered its estimates for AMD's first-quarter revenue and earnings per share to $6.6 billion and $0.80, respectively, below Wall Street's consensus expectations of $7.04 billion and $0.95. The full-year performance expectations were also downgraded, with Wolfe Research lowering AMD's full-year revenue forecast from $33.6 billion to $29.9 billion, and earnings per share forecast from $5.33 to $4.19, both below market consensus.

In addition to challenges in the data center GPU business, AMD also faces other challenges, such as seasonal weakness in the personal computer market: after experiencing strong demand in the fourth quarter, PC market demand may slow down; the gaming business continues to be weak, with related revenue showing no significant improvement.

Looking ahead, facing pressure from competitors like NVIDIA, AMD's growth in the AI chip market may be limited