AMD’s stock took a hit this week, dropping 6% after its Q4 2024 earnings report, despite posting solid results. While revenue beat expectations and its PC segment performed well, the company’s AI-focused Data Center division fell short.
Revenue from this sector surged 69% year-over-year to $3.86 billion, but that growth rate slowed from Q3’s 122% and missed analysts’ $4.14 billion target.
The biggest concern? AMD’s struggle to close the AI gap with Nvidia. While AMD is pushing forward with its MI350 GPUs in mid-2025 and the MI400 series in 2026, it still lags Nvidia by about a year.
Nvidia holds an 80-85% AI market share, and its dominance—combined with custom AI chips from major cloud providers—makes it difficult for AMD to “win” the AI race.
Bank of America analyst Vivek Arya, while acknowledging AMD’s strong product execution, remains cautious. He rates the stock as Neutral with a $135 price target (a 23% upside), citing risks in AI competition and AMD’s exposure to more cyclical markets like PCs and gaming.
Despite this, AMD retains a Moderate Buy consensus from analysts, with an average price target of $148.28, suggesting a potential 35% upside.
While AMD remains a strong player in CPUs and continues growing in AI, its hopes of challenging Nvidia’s dominance are fading—for now.
