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HSBC: Wall Street Underestimating Advanced Micro Devices Inc. (AMD)’s AI GPU Business

Sat, Sep 13, 2025, 8:53 AM 2 min read

Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the best tech stocks to buy for the long term. On September 9, HSBC reiterated a ‘Buy’ rating on the stock but cut its price target to $185 from $200. The price target cut comes amid concerns about the average selling price of the company’s M1355 chip.

Wall Street Underestimating Advanced Micro Devices Inc. (AMD)'s AI GPU Business

Posonskyi Andrey/Shutterstock.com

According to HSBC, the price target cut was necessitated by the fact that the average selling price of AMD’s M1355 chip would be $23,000, down from the previous $25,000 per unit. The lower average selling price has prompted HSBC to lower its 2026 AI GPU revenue from $15.1 billion to $13.9 billion.

Despite the reduced AI GPU revenue estimate due to a lower average selling price, it is still 20% above consensus estimates. Likewise, HSBC insists Wall Street is underestimating AMD’s AI GPU business despite the slight price revision.

Additionally, HSBC anticipates that AMD will benefit from major cloud service providers, including Meta, Microsoft, and Oracle, as they begin testing its M1400 rack solution. The push is expected to diversify the company’s revenue base.

Advanced Micro Devices Inc. (NASDAQ:AMD) is a semiconductor company that designs and develops high-performance computing and visualization products, including CPUs, GPUs, and adaptive computing solutions. Its technologies are used in PCs, gaming, data centers, and embedded systems to advance markets such as artificial intelligence (AI), cloud computing, and others.

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