Why Advanced Micro Devices (AMD) Slipped 11% on Friday


 
 
10:11 10/19/2018

As Advanced Micro Devices AMD  slowly began to recover from its 50-day moving average, an analyst came along and wrecked the party.

Reportedly, New Street Research analyst Pierre Ferragu initiated coverage on the stock with a sell rating with a price target of $18. "AMD's stock price reflects a scenario we don't believe possible," Ferragu said. The company has scored some great wins in recent years but it "cannot win sustainably and beyond a niche positioning."

He argues that Intel can easily bring an architecture similar to AMDs to market with better performance. However, others may not agree with the sentiment.

In September 2018, Bank of America Merrill Lynch got much more bullish on the stock.



The firm raised its price target to $35 from $25, citing the chipmaker's process manufacturing advantage over Intel. Bank of America also reiterated its buy rating for the chipmaker.

"AMD's accretive share gains could extend given main rival's Intel's manufacturing challenges," analysts argued. "We anticipate continued positive news flow around customer traction (engaged with all top 7 cloud providers, only announced 3 thus far); and around the pipeline."

From here, it’ll be interesting to see what happens.


This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
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