Baird analysts revised down their price target for AMD (NASDAQ:AMD) from $170.00 to $125.00 while maintaining an Outperform rating.

The analysts explained the price target adjustment by stating that they are lowering their 2024 estimates for the upcoming year due to a reduced outlook for data center revenue. This adjustment stems from the delay in the original projection for significant AI market share and the slower ramp-up timing for the MI300, primarily because of the absence of design wins outside of supercomputing applications and the lack of a well-established software ecosystem.

Additionally, the analysts noted that Nvidia's GH200 is experiencing strong demand across all customer segments, which represents a new layer of competition set to begin next year and could potentially cannibalize x86 architectures. Despite these challenges, the analysts expressed a positive outlook for gaming, with expectations of a rebound starting in the fourth quarter.