By Brian Swint
Advanced Micro Devices, stock was falling in premarket trading Wednesday after it caught a downgrade.
The semiconductor maker that competes with Nvidia and Intel, is not keeping up in the race to produce chips for artificial intelligence.
Strategists at HSBC led by Frank Lee lowered their price target on the shares to $110 from $200 and cut the rating to Reduce from Buy. After noting the stock’s decline in the past three months, Lee said it could drop further.
The company’s road map for producing AI graphics processors “is less competitive than we previously thought,” the analysts said in a note Wednesday.
While Nvidia is still clearly the leader among AI chip makers, AMD, Broadcom, and Marvell Technology are also competing for market share as Big Tech firms such as Google-parent Alphabet and Facebook-owner Meta Platforms ramp up investment.
AMD stock slid 2.3% to $124.54 in premarket trading. Coming into the session, the shares are down 26% over the past three months, though they have climbed 5.4% in the past five days.
Write to Brian Swint at brian.swint@barrons.com