AMD Stock Drops After HSBC Sees Limited Upside Ahead Of Q1 Earnings

• AMD will likely meet earnings expectations, but not exceed.
• HSBC downgrades AMD to ‘hold’ from ‘buy.’
• 36 analysts rate the stock ‘buy’ and 11 rate ‘hold,’ according to Koyfin data.

Advanced Micro Devices (AMD) share price fell 5% on Monday following an HSBC report which stated the chipmaker might not exceed earnings expectations ahead of its quarterly earnings due on Tuesday. 

HSBC downgraded the semiconductor stock to ‘hold’ from ‘buy’ but raised its price target on shares to $340 from $335, suggesting the stock could fall around 6% from Friday’s close of $360.5. 

“The firm does not expect an upside earnings surprise from AMD's upcoming Q1 report despite strong demand, contrary to Intel's Q1 beat and guidance raise,” HSBC analyst Frank Lee said Monday in a note to clients. 

“AMD’s recent share price rebound … has significantly raised market expectations over its server central processing unit (CPU) growth momentum.” 

Shares of the semiconductor firm have jumped nearly 75% in April alone amid a surge in demand for computing power from hyperscalers like Google and Meta as they plan to unleash billions in AI-linked capital expenditures this year.  

AMD Q1 Expectations 

Analysts expect Q1 revenues of $9.91 billion and earnings of $1.29 per share, and forecast Q2 revenues at $10.52 billion with earnings of $1.43 per share, as per Koyfin data. 

HSBC predicts that AMD will log $10.1 billion in revenue in the first quarter, roughly in line with analysts’ consensus and estimates second-quarter revenue of $10.5 billion, also matching the Street’s expectations.

AMD has limited upside opportunities to significantly surpass market expectations in 2026, capped by TSMC’s capacity constraints, HSBC noted.  

AMD is currently exploring a transition from dependence on TSMC (Taiwan Semiconductor Manufacturing Company) to potentially using Intel Foundry Services (IFS) as a secondary manufacturing partner for its chips. 

“AMD remains dependent on TSMC’s foundry capacity, which is going to see even tighter capacity constraints throughout 2026e, especially in 3nm nodes,” Lee added. 

AMD Retail View 

Retail sentiment on Stocktwits was ‘bullish,’ and message volumes ‘high’. 

One user highlighted the pushback received on the downgrade, stating that the stock still has some meaningful upside. 

The stock has soared 60.2% year-to-date.

For updates and corrections, email newsroom[at]stocktwits[dot]com.