Why AMD Stock Fell 11.9% in December and Lost Rebound Gains in 2025

Advanced Micro Devices (NASDAQ: AMD) stock saw significant sell-offs in December's trading. The semiconductor company's share price closed out the month down 11.9%, according to data from S&P Global Market Intelligence.

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AMD data by YCharts.

With December's trading concluded, AMD stock closed out 2024 down roughly 18%. The chip specialist's share price fell in the final month of 2024 as analysts became more cautious about the stock and issued downward share-price and revenue-outlook targets.

Analysts became less bullish on AMD stock last month

On Dec. 9, Bank of America published coverage of AMD, downgrading the stock's rating from buy to neutral. The bank also lowered its one-year price target on the stock from $180 per share to $155 per share. Then, Truist published a note lowering its price target on Dec. 16. The investment company cuts its one-year price forecast from $180 per share to $155 per share and maintained a hold rating on the stock.

The next day, Wolfe Research published a a new report on the company and stated it expected AMD's 2025 revenue to come in roughly $3 billion below the average Wall Street estimate. According to Wolfe, AMD's progress in artificial intelligence (AI) appears to be weaker than anticipated.

As a result, the investment firm expects the company will only record $7 billion in AI revenue this year. With these dynamics in mind, Wolfe's analysts see the company having trouble heading into its anticipated quarterly report this month.

Finally, Morgan Stanley published a note maintaining an equal-weight rating on the stock on Dec. 20. The investment company lowered its one-year price target on the stock from $169 per share to $158 per share, citing the potential for tough competition from Nvidia to limit the company's growth opportunities in the AI space.

What's up with AMD stock in 2025?

After a month of double-digit sell-offs, AMD stock started the new year with some rebound trading momentum. The company's share price had been up roughly 4% heading into the start of trading on Jan. 8, but fresh bearish coverage and investor consideration of macroeconomic risk factors have wiped out those gains. The chip-specialist's stock is now roughly flat in 2025's trading.

Before the market opened this morning, HSBC published new coverage on AMD and issued a rare double downgrade for its rating on the stock. The bank lowered its rating from buy to reduce and cut its one-year price target from $200 per share to $110 per share. HSBC's analysts cited AMD's lack of competitive strength against Nvidia as a key reason for the ratings downgrade and price cut.

AMD is heading into 2025 with lowered expectations. Nvidia has continued to dominate the market for advanced processors for data centers, and some analysts are worried that AI won't become the powerful near-term catalyst for the business that had previously been expected. On the other hand, it's far too early to write off AMD -- and it's possible that recent pressures for the stock will help set the stage for an explosive comeback rally.

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HSBC Holdings is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Bank of America, Nvidia, and Truist Financial. The Motley Fool recommends HSBC Holdings. The Motley Fool has a disclosure policy.