Advanced Micro Devices (AMD), the chipmaker, is facing a more cautious view from top Northland analyst Gus Richard despite strong near-term momentum. The 5-star analyst downgraded the stock to Market Perform from Outperform and set a $260 price target, citing concerns about growth beyond 2026.
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Top Analyst Warns of Slower AI Spending Ahead
Richard expects AMD to deliver solid results in the near term and likely beat estimates in its upcoming report, scheduled for May 5. However, he believes the outlook may not be as strong as recent results from Intel (INTC), which has been gaining ground.
Looking ahead, the analyst sees growing risks for AMD’s business. He expects AI infrastructure spending to slow in 2027 as large tech firms rein in capital spending and focus more on returns. At the same time, companies like OpenAI and Anthropic are shifting toward tighter pricing models, which could limit demand growth and weigh on AMD.
Richard also pointed to rising competition. Nvidia (NVDA) remains a dominant player and continues to secure a large share of chip supply from TSMC (TSM), which could limit AMD’s growth. Meanwhile, Intel is improving its position, which may pressure AMD’s pricing and margins.
While AMD’s fundamentals remain strong, Richard believes expectations for 2027 are too high. He noted that ongoing R&D spending and competitive pressures could limit margin expansion, even as the company benefits from AI demand in the near term.
Is AMD Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for AMD is Strong Buy, based on 19 Buy and eight Hold ratings over the past three months. With that comes an average AMD stock price target of $295.04, representing a potential 15.17% downside for the shares.
