Advanced Micro Devices (NASDAQ: AMD) will post earnings for its latest quarter on Tuesday after the close, and, in recent analyst notes, it seems views on the company’s prospects are mixed.
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Last week Cowen analyst Matthew Ramsay told clients in a research note that despite AMD’s very strong product roadmap, the December quarter and March quarter periods remain complicated but should mark the bottom.
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The analyst, who maintained an Outperform rating and a $100 price target on AMD, expects the company’s results to quickly improve through 2023 and further still in 2024, particularly boosted by cloud share and ASP expansion in servers. Ramsay believes AMD remains in a very strong competitive position.
However, Bernstein analyst Stacy Rasgon downgraded AMD to Market Perform from Outperform last week, cutting the firm’s price target on the stock to $80 from $95 per share.
Rasgon explained that the PC environment “has grown considerably worse” since Bernstein's upgrade of AMD in February last year. Even so, Bernstein believes AMD would prove relatively more immune to channel degradation if proved incorrect.
Rasgon stated he is is “growing more wary of potential PC dynamics” and argues that Intel's behavior has been “semi-destructive” of late, using price and capacity as a “strategic weapon.” Ahead of AMD’s results, Bernstein sees incremental risk to the company’s estimates and believes multiple expansion is unlikely until investors “get a sense of the bottom.”
On the other hand, at Barclays last week, AMD was upgraded to Overweight from Equal Weight, with its price target lifted to $85 from $70.
Analyst Blayne Curtis gave his 2024 estimates and became more positive on the semiconductor company but more negative on semiconductor capital equipment.
Barclays prefers stocks that offer exposure to datacentres, PC, and handsets in 2023, as Curtis believes that while the handset market has been correcting since the second half of 2021, softer forecasts for Q1 this year could potentially be “the last major cut.” In addition, the analyst feels that China headwinds can become tailwinds in the second half of this year.
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