Should Investors Buy the AMD Stock Pullback? Wall Street’s Verdict Just Dropped

AMD's recent dip has traders buzzing—is this a bargain or a bear trap?

Wall Street analysts weigh in as the chipmaker faces headwinds

Some see buying opportunity while others warn of further downside risk

The semiconductor sector's volatility continues testing investor nerves

Because nothing says 'calculated risk' like chasing a falling knife in tech stocks

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Analysts’ Views on Advanced Micro Devices Stock

At the Advancing AI event in June, AMD highlighted its Instinct MI350 Series GPUs (graphics processing units), Instinct MI400 chips set to be launched next year, and the Helios rack-scale AI platform. The company’s new launches addressed investors’ concerns about AMD significantly lagging behind Nvidia (NVDA) in the AI chip race.

While sentiment for AMD stock has improved compared to the selloff seen earlier this year, some analysts are worried about the impact of chip export restrictions and margin pressures. Moreover, Broadcom’s (AVGO) solid Q3 FY25 results and outlook have raised concerns about growing competition in the AI chips market.

On Thursday, Erste Group analyst Hans Engel downgraded AMD stock to Hold from Buy. Engel noted that AMD expects further growth in 2025, driven by higher demand for high-performance CPUs and GPUs in data center environments. That said, the analyst highlighted that AMD’s operating margin in recent quarters has been lower than the sector average. In fact, the company’s EBIT (earnings before interest, tax, depreciation, and amortization) margin was slightly negative in the last quarter.

Overall, Engel contends that AMD’s P/E multiple looks elevated, given that its operating margin has not yet improved and its return on equity is below average.

Unlike Engel, the majority of analysts covering AMD stock remain bullish on its long-term prospects. For instance, Truist Securities analyst William Stein recently reiterated a Buy rating on AMD stock with a price target of $213. Interestingly, Stein upgraded AMD’s rating to Buy from Hold in late August. The analyst believes that AMD will continue to gain traction among customers. Stein added that a meeting with management reinforced his constructive views on the stock.

Is AMD Stock a Buy, Sell, or Hold?

Overall, Advanced Micro Devices stock scores Wall Street’s Moderate Buy consensus rating based on 25 Buys and 12 Holds. The average AMD stock price target of $184.44 indicates 18.5% upside potential from current levels.