AMD Stock Slumps as Analysts Cut Price Targets After Data Center Revenue Misses Estimates

Advanced Micro Devices (AMD) shares took a nosedive on Wednesday after the chipmaker's data center sales missed Wall Street's expectations. The stock plunged 7% intraday to $111.12, extending a year-long decline of over 33%. Analysts from several firms, including Bank of America, Citi, Mizuho, Jefferies, and UBS, lowered their price targets following the news.

The chipmaker's data center sales, which account for a significant portion of its revenue, grew 69% year-over-year to $3.86 billion but fell short of the $4.14 billion expected by analysts. AMD's client CPU segment, however, performed well, with revenue up 58% year-over-year to $2.3 billion, beating analyst estimates of $1.93 billion.



Wedbush analysts, however, called the selloff "overdone," pointing to the strength of AMD's client CPU segment. They argued that AMD could be poised to take market share from rival Intel (INTC) in the PC chip market.



AMD's shares have been trending lower within a descending channel since falling below the 200-day moving average in October 2023. Key support levels to watch include $110, $95, and $81, while a key overhead area near $130 may provide resistance during countertrend rallies.



In conclusion, AMD's data center revenue miss has led to a sharp decline in the company's stock price, with analysts cutting their price targets. However, the strength of AMD's client CPU segment and the potential for market share gains in the PC chip market could provide a catalyst for a turnaround. Investors should closely monitor AMD's stock price and key support and resistance levels as the company navigates the competitive AI chip market.