Citi's downgrade of Advanced Micro Devices (AMD) from "Buy" to "Neutral" has raised concerns among investors, primarily due to anticipated slowing AI revenue growth and potential inventory build-up. The report suggests that AMD's AI revenue may remain flat or decline in the first half of 2025, which contrasts with the growth seen by its peers. Additionally, the lack of AI revenue guidance and potential CPU inventory build-up from increased production in Q4 2024 are causing unease. Despite AMD's Q4 2024 revenue surpassing expectations with a 12% q/q increase, the company's guidance for a 7% q/q revenue decline in Q1 2025 aligns with these concerns. Citi's revised 2025 revenue and EPS estimates, along with a lowered price target, further reflect the market's cautious outlook.
The GraniteShares 2x Long AMD Daily ETF (AMDL) experienced a significant decline, dropping 19.29% to $5.90 at 8:20 AM on Wednesday, February 5.