Advanced Micro Devices Inc (NASDAQ:AMD, ETR:AMD) may have recently faced a cut to MI300X orders by a US hyperscaler, Baird analysts warned on Monday.
Following cuts to orders for NVIDIA Corp (NASDAQ:NVDA, ETR:NVD) processors late last year, analysts noted hyperscalers, which run data centers for cloud services, had been known to scale back.
“We do not know whether the cut is due to market share shift or the hyperscaler scaling down to numbers more in line with shipment expectations,” the bank said in a note.
This could be a move to bring orders in line with shipment expectations or on the back of improved supply of Nvidia’s own H100, expected from June.
That said, Baird acknowledged there had been no slowdown in orders for products relating to artificial intelligence, given supply was expected to be tight into 2025.
“Conventional data center demand has slightly improved recently per our checks,” the bank said,
“[This is] tracking slightly higher than prior channel expectations of flat to slightly down for the year.”
This should bode well for potential upward revisions to AMD’s revenue guidance this year, with Baird reiterating an ‘outperform’ rating and US$200 share price target.
AMD does face challenges however, Baird added, including from rival NVIDIA offering an entire ecosystem down to graphics processing unit (GPU)-based cloud services, as well as competition from its new Grace units.
Shares fell 0.5% to US$169.55 on the news.