Morgan Stanley Changed its Mind About AMD and Shareprices Skyrocket as a Result

12:20 06/07/2019

American multinational semiconductor company AMD AMD  saw its shares jump after the company received an upgrade from Morgan Stanley analyst Joseph Moore who long doubted the company.

Moore called his previous call and ‘obviously’ wrong bearish call, and said that the coming E3 gaming conference is a possible positive catalyst for the stock.
Shares were up over 5% after Moore upgraded AMD shares from 'underweight' to 'equal-weight.'

It was in late 2017 that Moore had given the stock an 'underperform' rating. Since then shares have exploded over 165%. Shares are up about 69% this year so far.

“While our earnings concerns over the last 12 months have played out and 2H numbers still look high, the table is set well for 2020 and there are positive near-term catalysts,” Moore wrote.

He added, “We still think there is too much short-term optimism, but we struggle with catalysts to remain underweight, especially into E3.'

The E3 is a major gaming conference that is set to take place next week and according to Moore, the company will announce a partnership with Microsoft Corp. then.

“The bottom line is that due to a combination of the way that AMD implements virtualization, Nvidia’s NVDA, +1.77% desire to pursue higher-margin GeForce Now-based implementations, and AMD’s relationships with console developers, AMD can be in a very strong position to benefit if these cloud-based gaming initiatives start to take off,” Moore said.

“With Intel’s INTC, +1.23% comeback at best deferred and Nvidia’s heavy investment in ray tracing that will have a longer-term payoff,” AMD could be on a path to “sustained profits,” the analyst also remarked.
Moore also raised his price target from $17 to $28.

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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