AMD Shares Tumble 7% After Seaport Downgrade on AI Chip Concerns
Seaport Global Securities moves AMD to Neutral from Buy, citing slowing momentum in its crucial AI accelerator business and challenges in converting sales.
Shares of Advanced Micro Devices (NASDAQ:AMD) plunged nearly 7% in trading after Seaport Global Securities downgraded the stock, raising concerns about the growth trajectory of the chipmaker's artificial intelligence business.
Seaport analyst cut AMD's rating to 'Neutral' from 'Buy', triggering a sharp sell-off. The firm's research pointed to a potential slowdown in AMD's AI accelerator division, noting difficulties in converting initial customer evaluation systems for its MI-series chips into high-volume commercial orders. that major customers like Microsoft and Meta are re-evaluating their AI spending plans, which could temper growth prospects.
The market reaction was swift, with during mid-day trading on Friday. The downgrade comes after a significant run-up for the stock, which had surged 61% over the past six months, fueled by investor optimism around its AI potential as a primary competitor to Nvidia.
Despite the bearish signal from Seaport, the broader Wall Street consensus on AMD remains a 'Moderate Buy,' with an average price target of $181.33. Several other investment firms have recently reiterated 'buy' ratings and raised their price targets, citing strong long-term demand for AI hardware. However, Seaport's note suggests that the timeline for AMD to capture a meaningful share of the AI accelerator market may be longer than previously anticipated.
Adding to the narrative, recent filings disclosed that company insiders, including CEO Lisa T. Su, sold shares, while the company's board has also authorized a substantial $6 billion share buyback program. While the downgrade has cast a shadow, AMD's recent Q2 2025 earnings showed a , indicating solid performance in other segments even as its AI strategy comes under closer scrutiny.