Advanced Micro Devices (NASDAQ:AMD) saw its stock fall 1% Thursday morning after Erste Group analyst Hans Engel downgraded the semiconductor firm from Buy to Hold.
Engel cited concerns over AMD’s operating margins, noting they are “lower than the sector average.” He also highlighted that the company’s EBIT margin “was even slightly negative in the last quarter.” Despite AMD projecting continued growth in 2025 fueled by rising demand for high-performance CPUs and GPUs in data centers, Engel believes the current P/E ratio is elevated given the company’s “below-average return on equity.”
The morning decline partially offsets a 2.4% gain recorded yesterday. Over the past 30 days, AMD shares have slipped more than 8%, though they remain 30% higher than a year ago.
The chipmaker has been actively positioning itself to capture growth in the artificial intelligence market, particularly in the data center GPU segment, competing with Nvidia. However, concerns over profitability following the downgrade appear to have dampened investor sentiment.
Advanced Micro Devices stock price
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