By Nate Wolf

Shares of Advanced Micro Devices slipped after Seaport Research Partners cut its rating on the chip maker, saying it may not be winning market share in artificial intelligence as fast as investors believe.

Seaport Research Partners analyst Jay Goldberg no longer considers AMD a Buy, lowering his rating to Neutral with no price target in a research note Thursday. The company's artificial-intelligence accelerator business has long-term potential, but Seaport believes near-term expectations are too high.

AMD stock was down 1.7% to $159.40 on Thursday. Shares were up 34% in 2025 as of Wednesday's close.

AMD has made a strong push this year to compete with Nvidia, the industry leader, in the artificial-intelligence chip market. Most notably, the California-based company unveiled a new series of AI chips in June, which it said Meta Platforms and Oracle Cloud would use.

But Seaport sees signs that AMD is struggling to increase orders from many of the customers the company has touted, though Goldberg didn't cite specific names. Some customers' initial purchases are unlikely to convert into "volume orders" for AMD's new AI systems, Seaport said.

"Our recent conversations across the supply chain point to AMD experiencing slowing progress with its AI accelerator business," Goldberg wrote. "We think this makes it increasingly challenging for them to meet over-high expectations this year."

The firm also expressed concern that AMD's progress at Microsoft and Meta may be slowing as those so-called hyperscalers re-evaluate their AI spending. Microsoft has said its capital expenditure growth will decelerate in 2026, though Meta Chief Financial Officer Susan Li said the company would "ramp our investments significantly" on its second-quarter earnings call.

AMD didn't immediately respond to a request for comment.

Seaport's downgrade comes just over a week after Truist Securities upgraded AMD to Buy from Hold. Truist wrote that the company was attracting more AI customers and could eat into Nvidia's share of the chip market.

"Over the last month or so, contacts have increasingly noted that hyperscalers are working with AMD in a partnership manner, expressing true interest in deploying AMD at scale," wrote Truist's William Stein. How long it will take for AMD to secure a significant market share, however, is impossible to know, Stein said.

The difference in opinion may be less stark than it appears. Seaport isn't writing AMD off as an AI challenger: It just doesn't believe the company will claim a major slice of the market in the immediate future. The firm lowered its forecasts of revenue and earnings per share for fiscal 2025 and 2026.

"While we think the company remains a viable long-term competitor in the AI Accelerator market, the timeframe for them achieving more meaningful share is further out," Goldberg wrote. "We downgrade to Neutral."

Write to Nate Wolf at nate.wolf@barrons.com

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September 04, 2025 09:46 ET (13:46 GMT)

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