AMD cut at Wolfe Research on lower expectation for datacenter GPU revenue By Investing.com

Investing.com – Wolfe Research downgraded AMD (NASDAQ: ) from Peer Perform to Outperform in a note on Thursday, citing a reduction in the company’s data center GPU revenue expectations for 2025.

Analysts are now forecasting $7 billion in data center GPU revenue for the year, a significant drop from a previous estimate of more than $10 billion.

“We now expect DC GPU revenue of $7 billion for CY25, versus our previous expectation of $10 billion+,” Wolfe Research said.

They expect AMD to not provide guidance for the sector in its upcoming fourth-quarter earnings call.

Wolfe Research’s revised outlook follows recent visits to Asia, where ODM construction plans showed only modest quarterly growth for AMD.

“We estimate data center GPU revenue in the range of $1.5-2.0 billion for Q4 and $7 billion for CY25,” the note explained, adding that this is well below approx. of $10 billion of purchase expectations.

Analysts also highlighted challenges in AMD’s other segments. They predict sluggish PC seasonality with a 17% decline in the consumer segment for Q1 2025, continued weakness in gaming with a 20% decline and an immediate recovery in the embedded segment, which could improve in the last half of the year.

However, there is some optimism for AMD’s upcoming MI350 series, which is expected to be released in the second half of 2025. Wolfe Research noted that this could be a catalyst, offering more significant redesigns and upgrades than its predecessor.

Overall, Wolfe Research lowered its 2025 revenue and earnings estimates in AMD to $29.9 billion and $4.19 per share, respectively, from previous forecasts of $33.6 billion and $5.33 per share.