HSBC's recent downgrade of Advanced Micro Devices (AMD) from "buy" to "reduce" has sent ripples through the market, primarily due to concerns over AMD's competitive positioning in the AI sector. The downgrade, which slashed the price target from $200 to $110, reflects apprehensions about AMD's AI GPU roadmap and the tepid demand for its MI325 GPU. The challenges are compounded by Samsung's production issues with HBM3e memory, potentially hindering the GPU's performance. This development comes at a time when AMD is striving to hold its ground against industry giants like Nvidia and new entrants such as Marvell Technology, despite showcasing new products at CES 2025.
The GraniteShares 2x Long AMD Daily ETF (AMDL) has reacted sharply to these developments, dropping 8.61% to $7.75 as of 9:40 AM on Wednesday, January 8.