Advanced Micro Devices shares have soared over the past month, but the stock is poised to give up some of that gain as the company prepares to report first-quarter earnings that will likely meet, but not exceed, Wall Street expectations, HSBC said. The investment bank downgraded the semiconductor stock from “buy” to “hold.” The company raised its price target to $340 from $335, which suggests the stock could fall about 6% from Friday’s closing price. Monday’s downgrade sent the stock down nearly 3%. “AMD’s recent stock price recovery has significantly increased market expectations for the company’s server central processing unit (CPU) growth momentum,” analyst Frank Lee said in a note to clients on Monday. “Despite a strong server CPU product lineup, we do not believe AMD will be able to lift 2026e server CPU revenue to meet unexpected server CPU demand.” The company’s stock has risen about 66% in the past month, driven by a surge in demand for artificial intelligence-related CPUs and graphics processing units (GPUs). Hyperscalers such as Meta and Google plan to use these chips in their data centers to power their AI ambitions, which have been the focus of billions of dollars worth of investment since the start of the year. AMD 1 Million Mountain stock has risen 66% over the past month. But unlike competitors such as Intel, which has the ability to ramp up production, Lee expects AMD to be constrained in its ability to meet strong demand. “AMD remains dependent on TSMC’s foundry capabilities and will likely see even more severe capacity constraints through 2026, especially at the 3nm node,” he wrote. “We still think there is potential for server CPU ASPs to rise further due to CPU shortages, but the upside for unit growth in 2026e remains limited.” HSBC expects AMD to post revenue of $10.1 billion in the first quarter. This is roughly in line with the analyst consensus estimate of $9.9 billion. In an analyst note, HSBC estimated second-quarter revenue of $10.5 billion, in line with TheStreet’s forecast. HSBC’s call runs counter to Wall Street consensus. According to LSEG data, out of 55 analysts covering the stock, only 12 have a hold rating on the stock.
