Aug 5 – Advanced Micro Devices (NASDAQ:AMD) is riding an 80% rally over the past three months, but Lynx Equity Strategies thinks the stock may be moving too fast for its fundamentals to keep up.
Analyst KC Rajkumar raised concerns in a recent note, cautioning that AMD’s rise largely rests on high expectations surrounding its MI350/MI355 GPUs and the upcoming MI400X.
According to Rajkumar, many investors assume AMD has won key design wins with hyperscalers like Meta Platforms (NASDAQ:META) and Amazon Web Services, but he questions whether AWS has truly adopted AMD’s chips. Without AWS, AMD could be leaning too heavily on Meta, he warned.
Lynx isn’t convinced about the near-term adoption of AMD’s GPUs in data centers, despite some analysts forecasting over 30% revenue growth in 2025. The firm also doubts whether AMD’s resumed MI308 shipments to China will deliver much upside, considering Beijing’s restrictions on chip imports, already affecting Nvidia (NASDAQ:NVDA).
Rajkumar sees downside risk, suggesting a $150 price target if consensus EPS for 2026 lands around $6. He believes AMD may have priced in years of growth that haven’t materialized yet.
This article first appeared on GuruFocus.