Increasing competitive pressures will begin weighing down shares of Advanced Micro Devices , according to Bank of America. Analyst Vivek Arya downgraded the semiconductor stock to neutral from buy and cut his price target to $155 from $180. The new forecast is still 11% above where shares closed on Friday. AMD YTD mountain AMD YTD chart Arya pointed to AMD’s limited market share gain potential due to “higher competitive risks in AI against best-of-breed NVDA’s dominance.” Cloud customers have also begun to show their preference for custom chips, further weighing on the company’s potential market share. “Recently largest cloud customer Amazon strongly indicated its preference for alternative custom (Trainium/ MRVL) and NVDA products, but a lack of strong demand for AMD,” Arya added. “AMD does have a strong presence at Microsoft, Meta and Oracle, but their capex requirements for NVDA’s premium Blackwell could also limit share gain opportunity for AMD MI products. … [Long term], we continue to see NVDA at 80%+ accelerator share, custom chips 10-15%, with remaining shared by AMD and range of start-ups.” As a result of these headwinds, Arya lowered his 2025 AI GPU forecast for the company to $8 billion from $8.9 billion prior, which implies AMD will maintain its market share of around 4%. Shares of AMD have slipped 6% in 2024. The stock lost more than 1% in the premarket following the downgrade. Rival Nvidia, meanwhile, is up more than 187% year to date. Despite AMD’s lackluster performance, analysts are generally bullish on the stock. Of the 54 who cover the chipmaker, 44 have a buy or strong buy rating, LSEG data shows. The average price target on the stock also indicates upside of more than 32%.