AMD Under Pressure: Doubts About AI Sales Growth in 2025 | Cpu definition and function | Hardware restaurant | Types of computer hardware | Turtles AI

Wolfe Research raises doubts about AMD’s ability to meet Wall Street’s ambitious 2025 AI sales forecast, fearing a subsequent hit to its stock and predicting a subdued first quarter in the new year.

Key Points:

• Wolfe Research fears AMD will miss $10 billion AI sales target.
• The company may shy away from providing clear guidance on its 2025 outlook.
• Revised estimates predict Q1 2025 revenue will be lower than Wall Street expectations.
• AMD subsidiary Xilinx will see a significant recovery only in the second half of 2025.

Wolfe Research is sounding a warning about AMD’s future, calling into question the company’s ability to meet Wall Street’s wildly optimistic forecasts for AI sales in 2025. According to analysts, AMD’s future performance visibility is currently insufficient to justify market estimates of $10 billion in AI revenue. Instead, a more realistic projection could settle at $7 billion, a scenario that, if confirmed in the next financial results announcements scheduled for January 2025, would inevitably trigger expectations of an increase in forecasts during the year. However, Wolfe Research warns that such hopes could prove unfounded, fueling disappointment and the risk of a correction in the stock.

In the absence of solid data and with growing uncertainty about AMD’s ability to compete at scale in the AI ​​market, the research firm speculates that the company may even avoid providing detailed guidance for 2025. This attitude, while cautious, could generate further concerns among investors, already struggling with high expectations. At the operational level, the difficulties do not stop there: Wolfe Research predicts a complicated start to the year for AMD, especially in the first quarter of 2025. The seasonal slowdown in the PC sector, traditionally less performing in the first months of the year after a historically strong fourth quarter, should lead to an estimated revenue of 7.04 billion dollars, slightly below the 7.09 billion expected by the Wall Street consensus.

Another element of reflection concerns the subsidiary Xilinx, acquired by AMD, for which Wolfe Research expects a significant recovery in sales only in the second half of 2025, leaving a void in the company’s performance of the previous months. This slowdown in operations, combined with AI sales uncertainty, adds to concerns about AMD stock, so much so that Wolfe Research has chosen not to publish a clear valuation on the stock price, keeping its estimates under review as it assesses the situation.

Bank of America also recently added further concerns to the complex picture for AMD, highlighting the growth of Arm-based server CPUs, which captured 7% of the market in the third quarter of 2024, up sharply from less than 5% in 2023 and about 1% in 2022. This trend highlights an evolving competitive landscape, with Arm-based manufacturers gaining ground in key sectors, at the expense of traditional players such as AMD. However, on a more optimistic note, Rosenblatt remains confident in AMD’s ability to achieve a significant double-digit share of the GPU market by 2025, even without a comparable offering to that of the undisputed leader, NVIDIA.

In light of these contrasting analyses, AMD’s future looks like an uphill battle between operational challenges, market expectations, and increasingly pressing competitive dynamics.