Why AMD’s 2025 Could Be Worse Than 2024: AI Dreams Are Crumbling

Summary:

• AMD faces significant competitive headwinds in AI and GPU markets, struggling against NVIDIA’s dominance and custom silicon solutions from major cloud providers.
• Nvidia continues to dominate the business for AI accelerators, which could limit AMD’s projected market share at below 5%, especially as benchmark data for MI300X disappoints.
• AMD’s PC processor market may see a slowdown in 2025, with Intel and Qualcomm posing tough competition, especially in enterprise segments.
• As MI300X reality disappoints against the expectations, AMD’s valuation premium should slowly fade. Personally, I would expect AMD shares to trade down to 20-25x P/E.

I have been negative on Advanced Micro Devices (NASDAQ:AMD)(NEOE:AMD:CA) throughout the year 2024, arguing for the following:

AMD’s commercial momentum should be viewed with cautious optimism, acknowledging the significant competitive headwinds. In addition, there is increasingly scepticism among investors that

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