Wolfe Research Downgrades Advanced Micro Devices to Peer Perform

On January 19, 2025, Wolfe Research announced that it has decreased its rating for Advanced Micro Devices (NASDAQ:AMD) from an outperform to a peer perform status. This update was detailed in a report published on Thursday and highlighted by Marketbeat Ratings.

In addition to Wolfe Research, several other equity research analysts have recently revised their outlooks on AMD's stock. For instance, Morgan Stanley reduced its target price from $169.00 to $158.00, assigning an "equal weight" rating to the semiconductor giant in a report released on December 20. Similarly, Mizuho lowered its price target from $180.00 to $160.00 while maintaining an "outperform" rating on January 10.

On the same day, The Goldman Sachs Group shifted its position on AMD from a "buy" to a "neutral" rating, with its target price dropping significantly from $175.00 to $129.00. Citigroup also made adjustments, cutting the target from $210.00 to $200.00 with a "buy" rating noted on October 30, while Rosenblatt Securities reaffirmed a "buy" rating and gave a price target of $250.00 back on October 28.

In terms of ratings distribution, there are varying viewpoints among analysts regarding AMD’s stock. Two have classified it as a sell, six have indicated a hold rating, twenty-two have labeled it a buy, and two analysts have given it a strong buy rating. According to MarketBeat, the consensus rating for Advanced Micro Devices currently stands at "Moderate Buy," with an average price target estimated at $178.61.

Current Performance of AMD Shares

AMD's stock opened at $121.46 on the day of the report. Over the past year, it reached a low of $114.41 and peaked at $227.30. Presently, AMD boasts a market capitalization of $197.11 billion, with a price-to-earnings (P/E) ratio of 109.42. It holds a P/E to growth (P/E/G) ratio of 1.03 and a beta of 1.66, indicating its volatility relative to the market. Financial metrics show a debt-to-equity ratio of 0.03, a current ratio of 2.50, and a quick ratio of 1.78. Furthermore, its fifty-day moving average stands at $129.94, while the two-hundred day moving average is $145.32.

Earnings Report Highlights

AMD recently released its quarterly earnings report on October 29, wherein it reported earnings per share (EPS) of $0.92, aligning with analysts’ expectations. The company recorded revenues of $6.82 billion, surpassing the anticipated $6.71 billion. AMD reported a net margin of 7.52%, with a return on equity of 6.62%. Compared to the same quarter last year, revenues have increased by 17.6%, and last year’s earnings were reported at $0.53 EPS. Analysts predict AMD will post an EPS of 2.54 for the current financial year.

Recent Insider Transactions

In recent insider trading activities, CEO Lisa T. Su sold 80,000 shares of AMD on November 6, realizing a total of $11.51 million at an average selling price of $143.87. Following this transaction, she now owns approximately 3.57 million shares, valued at around $513.15 million, marking a 2.19% reduction in her holdings. Additionally, EVP Forrest Eugene Norrod disposed of 40,540 shares on November 5, earning about $5.74 million at an average price of $141.67. His ownership has decreased by 12.14% post-transaction, leaving him with around 293,347 shares valued at approximately $41.56 million. In total, insiders have sold 197,036 shares worth approximately $28.17 million over the last three months, while only 0.65% of the stock is owned by corporate insiders.

Institutional Investor Activity

Recent trends show hedge funds actively buying and selling AMD shares. Notably, Charles Schwab Investment Management increased its holdings by 1.9% in the third quarter, now owning nearly 9.66 million shares worth about $1.58 billion after adding 177,700 shares. Similarly, the Swiss National Bank grew its stake by 0.3%, raising its total shares to 4.80 million, valued at roughly $787.19 million following a purchase of 12,500 shares. Shum Financial Group Inc. established a new position in AMD valued at $858,000 during the same quarter. Furthermore, State Street Corp grew its holding by 2.3% and now owns approximately 70.17 million shares worth $11.51 billion after acquiring about 1.58 million shares. Geode Capital Management also enhanced its holding by 1.3%, owning roughly 34.24 million shares valued at about $5.60 billion. Overall, institutional investors now account for approximately 71.34% of AMD’s stock.

About Advanced Micro Devices

Advanced Micro Devices, Inc operates globally in the semiconductor industry. The company specializes in various segments including Data Center, Client, Gaming, and Embedded. AMD manufactures x86 microprocessors and graphics processing units (GPUs), along with other technology products such as chipsets, embedded processors, data center and professional GPUs, and system-on-chip (SoC) products.

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