Tue Dec 10 11:10:00 UTC 2024: ## AMD Stock Plunges on Analyst Downgrade and Weak AI Demand
**New York, NY** – Shares of Advanced Micro Devices (AMD) plummeted 5.4% on Monday, following a downgrade from Bank of America analyst Vivek Arya. Arya lowered AMD’s rating to “neutral” from “buy,” and cut his price target from $180 to $155. The move comes after a challenging week for the chipmaker, punctuated by Friday’s news that Amazon Web Services (AWS) isn’t yet seeing significant demand for AMD’s MI300 AI GPUs.
This lack of demand, coupled with Amazon’s recent announcement of its own Trainium2 AI chips and the anticipated release of Nvidia’s Blackwell chip, suggests increasing competition in the AI market. BofA’s Arya also cited projected weakness in PC demand for the first half of 2025 as a further headwind for AMD.
The high valuation of AMD stock—currently trading at 122 times earnings and nearly 30 times next year’s projections—likely contributed to the sharp reaction to the downgrade. The analyst believes that the rise of cheaper, internally-developed AI chips from cloud providers is squeezing AMD’s opportunities in this rapidly growing sector. While AMD had hoped to capitalize on the booming AI market, these recent developments paint a less optimistic picture for the company’s near-term prospects.
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