TLDR
- AMD stock fell 5.67% on Tuesday despite Bank of America reiterating a Buy rating with a $300 price target, representing 31% upside
- Nvidia’s Q3 2025 earnings report scheduled for Wednesday after market close could impact AMD’s stock movement
- Citi analysts named AMD the “king of the hill” in chips with most buying momentum among investors
- Year-to-date performance remains strong with AMD up 87.84% in 2025 and 72.55% over the past 12 months
- Investor concerns about an AI sector bubble potentially contributed to Tuesday’s decline
AMD stock dropped sharply on Tuesday even as Wall Street analysts doubled down on their confidence in the chipmaker. The disconnect between analyst optimism and market performance highlights the uncertainty facing semiconductor stocks.
Advanced Micro Devices, Inc., AMD
Bank of America analyst Vivek Arya maintained his Buy rating on AMD with a $300 price target. This forecast suggests shares could climb 31.15% from current levels. Arya holds a five-star rating on TipRanks.
The timing of AMD’s decline comes just before a major catalyst for the semiconductor sector. Nvidia will release its Q3 2025 earnings report after Wednesday’s market close. As the GPU market leader, Nvidia’s results could influence AMD’s stock trajectory.
AMD competes directly with Nvidia in the graphics processing unit space. The two companies are rivals in the AI chip market. Investors will watch Nvidia’s numbers closely for signals about industry demand.
Analyst Day Drives Investor Interest
Citi analysts gave AMD top billing among semiconductor stocks following recent investor conversations. Christopher Danely wrote that AMD received “most favored status” from investors. The company’s analyst day presentation appears to have resonated with the investment community.
Citi highlighted AMD’s higher earnings per share growth expected in 2027. The firm noted that revenue and margin targets presented at the analyst day strengthened investor confidence. AMD’s EPS target of $20 also drew positive attention.
Interestingly, Nvidia has become “less popular” among investors compared to AMD or Broadcom, according to Citi’s conversations. This marks a shift for Nvidia, which has dominated AI-related investment interest for nearly two years. Lower EPS growth projections may explain the changing sentiment.
AI Boom Drives Performance
AMD’s stock gains in 2025 stem largely from artificial intelligence demand. The company remains up 87.84% year-to-date despite Tuesday’s pullback. Over the past 12 months, shares have rallied 72.55%.
Strong demand for AMD’s server components continues to fuel growth. Both the company’s GPUs and CPUs are finding buyers in the AI infrastructure buildout. AMD recently announced a deal with OpenAI, the company behind ChatGPT.
The chipmaker says similar partnerships are in development. These collaborations position AMD to capture more AI-related revenue. However, concerns about an AI bubble are weighing on investor sentiment.
Bubble Fears Surface
Some market participants worry the AI sector has expanded too rapidly. A potential bubble scenario has emerged as a concern among investors. This anxiety may have contributed to Tuesday’s sell-off.
Wall Street’s consensus rating for AMD stands at Moderate Buy. This assessment comes from 27 Buy ratings and 10 Hold ratings issued over the past three months. Analysts see an average price target of $281.78 for the stock.
That target implies a 23.8% upside from current levels. The forecast aligns closely with Bank of America’s individual projection. AMD trades with a premium valuation reflecting its AI growth prospects.
Citi noted that Broadcom remains a “top holding” for many investors despite some uncertainty around merchant TPU upside. Intel is also attracting more bullish attention on speculation about its foundry operations and improving server CPU business.
AMD’s position as Citi’s “king of the hill” in semiconductors reflects growing investor preference for the stock over other chip names. The company’s financial targets and growth trajectory appear to be winning over portfolio managers heading into year-end.
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