AMD (AMD-USA) closed Friday more than 2% down, as Morgan Stanley analysts see AMD’s performance as a particular concern during tough times for the chip industry.
According to a Monday report by Bernstein analyst Stacy Rasgon, Supermicro (AMD-USA), Intel (INTC-USA), the two chip makers have acknowledged that demand for personal computers (PCs) is waning and that the situation is worse than their already bleak prospects.
Research note from Morgan Stanley analyst Joseph Moore on Friday also found that almost every company in the tracker is making inventory corrections, but it takes a long time to wrap up and the season should be a bit chaotic again.
“Those who believe recent fundamentals have been affected by macroeconomic weakness should be a little more cautious,” he wrote. “We eliminate the excesses of COVID-19, including those related to inventories / supply chains and demand, but macroeconomic weakness remains. Further resistance will come in 2023”.
“AMD’s numbers are of particular concern,” Moore said in a research note. He lowered his AMD stock price target to $ 95 from $ 102 and revised down his earnings forecast for the company’s next two fiscal years, but maintained an “overweight” stock rating.
He wrote: “AMD initially expected the PC market to drop by a high single-digit percentage, and by mid-year it said it was still comfortable with the numbers if the PC market dropped about 15%. But now the market is likely to get worse, AMD is facing multiple obstacles in the customer business, namely the complete collapse of the GPUs and a mixed shift to commercialization of the customer business, in which Intel has a high market share. “
Moore lowered his 2022 earnings per share (EPS) forecast to $ 4.02 per share from $ 4.24 and lowered his 2023 EPS forecast to $ 4.40 per share from $ 4. 72.
AMD fell $ 2.22 on Friday to close at $ 67.96 per share. The stock has fallen 53% so far this year, underperforming the overall market.Nasdaq Composite Indexdown 31%.
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