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Key Takeaways
- AMD shares fell Thursday as the chip maker's stock was downgraded by Jefferies analysts.
- The analysts said they expect the performance gap between AMD's latest products and Nvidia's to widen.
- AMD shares lost more than 40 percent of their value during the past 12 months.
The shares of Advanced Micro Devices, Inc. (AMD) fell Thursday after Jefferies analysts downgraded it. They said they expect the performance gap to widen between AMD’s new products and Nvidia (NVDA).
The analysts downgraded AMD's stock to a "hold" and cut their price target to $120, down from a "buy" rating and $135 price target previously. That's well below the $139 average target of analysts tracked by Visible Alpha, five of whom have issued "hold" ratings, compared to seven "buy" and one "sell" rating.
AMD shares have dropped close to 4%, or $106, in recent trading. They’ve lost more than 40% over the past 12 months.
Jefferies Highlights Nvidia's 'Significant Performance Advantage'
Jefferies cited performance tests conducted in recent weeks with three open-source AI models, and wrote that Nvidia’s H200 graphics processor unit (GPU), still has a “significant performance advantage” over AMD’s MI300x. They also predicted that the gap would “expand even further” with Nvidia’s Rubin and Blackwell line.
Nvidia's GPU "outperformed AMD by a wide margin" across most of the analysts' tests. Despite AMD's product having some advertised advantages like higher memory bandwidth, they "do not result in superior real-world performance," the analysts wrote.
They also said that “expectations about mounting competition” from Intel contributed to the downgrade. They believe Intel could produce “fairly competitive” chips by next year, under its new CEO.
