AMD Downgraded on Worries About Its Ability to Keep Up with Nvidia
HSBC, a UK-based bank, downgraded AMD to Reduce from Buy. AMD’s share of the AI chip market will be lower than HSBC estimated previously, the bank explained. HSBC changed its outlook because AMD’s AI chips will be “less competitive” with Nvidia’s (NVDA) offerings than the bank thought before.
The demand for AMD’s MI325 GPU, which is used to create AI, is likely to lose momentum during the first two quarters of 2025, according to HSBC. The chip will probably have lower memory than expected due to probes facing Samsung, the bank stated.
And AMD’s MI350 chip, due to be launched in the second half of the year, probably will lack “an AI rack solution to compete with Nvidia’s NVL rack platform until late 2025 or early 2026,” HSBC warned.
Racks often hold hardware such as servers and hard disk drives.
HSBC slashed its price target on AMD stock to $110 from $200.
Edison International Sinks on Forest Fire Worries
Wildfires are rampaging near Los Angeles and are affecting significant parts of Edison’s service territory. The company has already cut power to at least 115,000 of its customers, and it may stop providing electricity to over 427,000 more customers.
Additionally, Edison’s equipment could be damaged by wildfires. And what’s more, as the result of a 2017 wildfire and “debris flows” that occurred in 2018, Edison’s International’s subsidiary, Southern California Edison, incurred at least $2.4 billion of ” claim settlement costs and expenses.” In September 2024, the company sought approval for a settlement deal for those disasters that would have its shareholders foot the bill for about $1 billion of those costs.
While we acknowledge the potential of AMD, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AMD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.