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AMD (NASDAQ:AMD) stocks erased earlier gains and fell more than 3.5% on Monday, when Northland Capital downgraded the semiconductor company, saying any benefits from artificial intelligence are likely built-in at this point.
“We forecast ai chip revenue of $125 billion in (calendar 2027) and model “AMD with $16 billion in ai revenue and 13% market share,” analyst Gus Richard wrote in a note to investors. “We believe AMD stock reflects much higher ai revenue in (calendar 2027) “.
“In our view, ai growth expectations are irrational exuberance,” Richard added.
It downgraded its AMD rating to market perform, which it also described as a “hell if we know” rating, from outperform.
Richard believes ai-related chip revenue in 2027 will be around $125 billion, up from about $45 billion to $50 billion in 2023. “Semiconductor revenue has grown 6% in the last few years.” last 20 years,” explained the analyst. “There is no reason to expect non-ai revenues to accelerate.”
If AMD's ai-related revenue is about $16 billion in 2027, that would double what it is estimated to be in 2024. At that rate, AMD would have 13% of the market and its share of market would be more or less similar to that of CPUs. where it competes with Intel (INTC).
Analysts are largely bullish on AMD (AMD). Have a BUY rating from the authors of Seeking Alpha, while Wall Street analysts rate it as BUY. In contrast, Searching Alpha's quantitative system, which consistently outperforms the market, rates AMD as HOLD.
