AMD’s AI Product Launches and Market Position: Navigating Challenges and Opportunities

Citi analyst Christopher Danely has reiterated their neutral stance on AMD stock, giving a Hold rating on May 27.

Christopher Danely’s rating is based on a combination of factors including AMD’s upcoming AI product launches and the potential for new customer acquisitions. While AMD is expected to introduce its MI355X and discuss the MI400, there is a need for more clarity on how these AI products will impact gross margins and revenue guidance. The company has acknowledged that its AI offerings are currently margin dilutive, and investors are seeking information on how AMD plans to achieve margin neutrality. Furthermore, while AMD has certain advantages over competitors like Nvidia, such as more HBM in its MI355X and a more open ecosystem with its ROCm software, Nvidia is still expected to dominate the AI GPU market.
Despite these challenges, there are potential positive developments for AMD in the latter half of 2025. The anticipated launch of the MI355X and MI400 could boost the AI business, and a recovery in the high-margin Xilinx segment could further enhance profitability. However, due to a one-time charge related to export controls, Danely has adjusted the earnings per share estimate for 2025 and maintained a Neutral rating, albeit with an increased target price reflecting improved sector sentiment.

Based on the recent corporate insider activity of 59 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of AMD in relation to earlier this year.