AMD stock price was trading at $62.28 as of 10:32 AM EDT.
When the semiconductor manufacturer Advanced Micro Devices (NASDAQ:AMD) released preliminary third-quarter sales statistics on Friday, it saw a more than 5% decline. The majority of analysts did not find the miss surprising, but others questioned if the slump in the semiconductor business would worsen.
AMD (NASDAQ:AMD) analyst Vivek Arya of Bank of America noted that the shortfall was “nearly exclusively” attributable to the PC segment but that a “barely inline” data center segment signaled weakness in the business. Arya has a buy rating and a $90 price target on AMD.
AMD Q4 earnings outlook
In a note to clients, Arya stated, “AMD did not update its Q4 outlook, but we expect trends to remain sluggish and model sales to decrease more [quarter-over-quarter] on Client weakness.
The analyst lowered the firm’s estimates for 2022 and 2023 earnings per share to $3.32 and $4.02, respectively, but maintained the buy rating due to Intel’s (INTC) ongoing share price growth and the stock’s attractive valuation, which is currently trading at 16 times 2023 earnings estimates, or close to the low end of its historical range.
AMD stock price: expert analysis
William Stein of Truist, who rates AMD (NASDAQ:AMD) as hold and has a price objective of $70, stated that he is more worried about the competition. Stein stated in a note to clients, “We applaud AMD’s strong share gains but see a rejuvenated Intel and forthcoming DPU/CPU devices from Nvidia as intensifying competitive challenges. Stein also reduced his forecast for 2023 earnings per share from $4.45 to $3.88.
According to the analyst, AMD’s (NASDAQ:AMD) PC market difficulties will likely continue to affect Intel (NASDAQ:INTC), which is 50% exposed to the PC market, as well as Nvidia (NASDAQ:NVDA), Diodes (NASDAQ:DIOD), and Monolithic Power Systems (NASDAQ:MPWR), which are each respectively exposed to 45%, 18%, and 15% of the PC market.
With a buy rating on AMD (NASDAQ:AMD) and a $95 price target, Benchmark analyst Cody Acree noted that the pre-announcement “not surprisingly” faulted the PC industry, but he added that because the stock has fallen more than 54% this year, it’s basically baked in.
We believe this pre-announcement is already largely priced into the company’s stock and therefore reiterate our Buy rating, but we are lowering our price target to $95 from $135 on our lowered estimates, Acree said in a note to clients. “The firm’s share price has already suffered to an outsized degree this year,” Acree wrote.
As a result of the PC market’s deterioration and new worries regarding the data center industry, Wells Fargo lowered its Advanced Micro Devices (NASDAQ:AMD) forecast on Wednesday. Investors will be keen to understand more on AMD’s stock drop.
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Author Jowi Kwasu