Wolfe Research downgraded Advanced Micro Devices (NASDAQ:AMD) from Outperform to Peer Perform, citing reduced expectations for the company’s datacenter GPU revenue in the upcoming year. The adjustment reflects concerns over the pace of growth in this critical segment.
The analysts now anticipate AMD’s datacenter GPU revenue to reach $7 billion in 2025, representing approximately 37% year-over-year growth. This is a significant reduction from the earlier forecast of $10 billion or more. Additionally, the company is not expected to provide specific guidance for its datacenter GPU business during its upcoming fourth-quarter earnings call, adding to the uncertainty surrounding its near-term prospects.
In terms of valuation, AMD currently trades at about 28 times the revised 2025 earnings per share estimate of $4.19, slightly below its five-year average price-to-earnings ratio of 31x. In comparison, NVIDIA trades at 32x 2025 EPS estimates, reflecting a smaller discount relative to its five-year average of 37x.