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

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.

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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.

While we acknowledge the potential of Advanced Micro Devices, Inc. (NASDAQ:AMD) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AMD and that has 100x upside potential, check out our report about the cheapest AI stock.

READ NEXT: 12 Best Consumer Goods Stocks Billionaires Are Quietly Buying and Goldman Sachs Penny Stocks: Top 12 Stock Picks.

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

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It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

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  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

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