Observed Signal · May 4, 2026 · Analyst Downgrade · Source: CNBC Investing · Impact: 4/5 · Sentiment: Neutral
HSBC Downgrades AMD Ahead of Earnings
HSBC downgraded Advanced Micro Devices (AMD) to a 'hold' from 'buy' ahead of its upcoming first-quarter earnings, citing elevated expectations for server CPU growth and supply constraints tied to Taiwan Semiconductor Manufacturing Co. (TSMC). CNBC host Jim Cramer pushed back on the downgrade, arguing agentic AI and the resulting surge in demand for CPUs — which AMD supplies alongside GPUs — give the company meaningful upside and pricing power. Shares fell more than 4% on Monday but remained up about 58% over the past month. AMD is scheduled to report Q1 earnings after Tuesday’s close. Cramer’s Investing Club Charitable Trust does not own AMD; it holds Nvidia, Broadcom and Arm Holdings.
Major company earnings and analyst rating changes matter to markets and signal supply constraints in semiconductor capacity that can affect AI compute availability and hardware pricing across tech sectors.
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Key Takeaways & Evidence Grounding
- HSBC downgraded Advanced Micro Devices (AMD) from buy to hold ahead of Q1 earnings.
- HSBC cited limited upside for server CPU growth and TSMC capacity constraints as reasons for the downgrade.
- CNBC host Jim Cramer said agentic AI is increasing demand for CPUs and defended AMD's upside potential.
- AMD shares fell over 4% on Monday but were up roughly 58% over the prior month.
- AMD is scheduled to report first-quarter earnings after Tuesday’s market close.
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Analysts: AMD to Outperform Despite Post‑Earnings Slide
Advanced Micro Devices reported Q2 adjusted earnings of $1.66 per share versus LSEG‑polled expectations of $1.62 and revenue of $11.54 billion versus consensus $11.28 billion. Despite the beat, AMD shares fell about 8% in premarket trading while the stock is up roughly 198% year‑to‑date as the company expands into AI‑focused server CPUs and datacenter GPUs and competes with Nvidia. Multiple Wall Street firms reiterated bullish ratings and raised price targets (Wells Fargo to $700; Bank of America $620; Goldman Sachs $640; UBS $730; Barclays $665; Citi $575), while a few firms expressed more cautious stances (Morgan Stanley equal weight $465; JPMorgan neutral $550). Analysts cited strong 2027 data‑center growth expectations (server CPU growth >70% and total DC growth well over 100%) as reasons for optimism, while noting near‑term guidance and other risks could pressure the stock.
Goldman Sachs Upgrades AMD After Blowout Earnings
Goldman Sachs upgraded Advanced Micro Devices to a buy from hold and raised its price target to $450 (from $240) after AMD reported first-quarter results that beat expectations and provided above-estimate Q2 revenue guidance. AMD shares jumped about 18% on the news. Goldman cited structural tailwinds from the rise of agentic AI and increasing inference workloads as drivers that should expand demand for server CPUs, forecasting AMD server CPU revenue of $21.1 billion by the end of 2027 — roughly 24% above consensus. Analyst James Schneider framed AMD as a way to gain exposure to enterprise and consumer agentic AI adoption. LSEG data showed 39 of 52 analysts covering the stock have a buy or strong buy rating.
HSBC Expects Nvidia to Beat Earnings and Raise Guidance
HSBC raised its price target for Nvidia to $325 from $295 and maintains a buy rating, arguing the AI chipmaker should not only beat fiscal first-quarter expectations but also provide stronger guidance for the second quarter. HSBC’s commentary, attributed to Frank Lee, cites momentum from Nvidia’s Blackwell products and the Rubin ramp and expects potential total-addressable-market expansion beyond traditional hyperscalers as the company pursues deals outside that customer set. Analysts polled by LSEG anticipate year-over-year earnings more than doubled and revenue up nearly 80%. The article notes Nvidia is the largest S&P 500 stock with a market cap above $5 trillion and shares up over 19% year-to-date.
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