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AMD stock tumbles after Bernstein downgrade

17:57 24 January 2023

AMD (AMD.US) share fell over 3.0% on Tuesday after Bernstein downgraded the chipmaker to market perform from outperform and reduced the price target from $95 to $80 citing continued weakness in the PC market.

  • The Wall Street firms point to deteriorating computer and new parts demand in the inflationary environment.
  • "...In recent months we have been growing more wary of potential PC dynamics, both given the market outlook as well as exacerbated by Intel's semi-destructive behavior as of late as they use both price and capacity as a strategic weapon, continuing to overship even amid broader breakdowns in the industry (it seems to us that Intel has decided that if the channel is going to hold parts, it might as well be their parts)," analyst Stacy Rasgon wrote in a note to clients.
  • According to Market research firm Canalys’ data PC shipments dropped 16% last year and difficult conditions are expected to persist through the second half of 2023.
  • On the other hand, Rasgon noted AMD strength in the server market, following the launch of the Genoa data center product and rising lead over rival Intel (INTC.US), which faces many issues with its Sapphire Rapids chips.

 

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AMD stock has a moderate buy rating based on 23 analysts rating, with average price target of $83.93 which implies 14% upward potential

AMD (AMD.US) stock is trading over 55.0% below its November 2021 high. Currently the price is approaching a crucial resistance zone around $80.90, which is marked with 23.6% Fibonacci retracement of the last downward wave, 200 SMA ( red line) and long-term downward trendline. As long as price sits below this level, the main sentiment remains bearish. Source: xStation5 

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