AMD (AMD-US) closed down more than 2 percent on Friday, as Morgan Stanley analysts see AMD’s performance as a particular concern during tough times for the chip industry.
According to a Monday report from Bernstein analyst Stacy Rasgon, Supermicro (AMD-US), Intel (INTC-US), the two chipmakers acknowledged that personal computer (PC) demand is fading and that the situation is worse than their already gloomy outlook.
Morgan Stanley analyst Joseph Moore’s research note on Friday further noted that nearly all companies in the track are making inventory corrections, but it’s going to take a long time to wrap up and the season should be a little bit chaotic once more.
“Those who believe that recent fundamentals have been affected by macroeconomic weakness should be a little more cautious,” he wrote. “We pull out the excesses of the Covid-19 era, including those related to inventory/supply chain and demand, but macroeconomic weakness remains Further resistance will hit 2023.”
“AMD’s numbers are particularly concerning,” Moore said in a research note. He lowered his price target on AMD’s stock 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 decline by a high single-digit percentage, and by mid-year said they were still comfortable with the numbers if the PC market fell around 15%. But now the market may be worse, AMD is facing Multiple headwinds in the client business, namely the complete collapse of GPUs, and a mixed shift to commercialization of the client business, where 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 a share.The stock is down 53% year-to-date, underperforming the broader market,Nasdaq Composite Indexdown 31%.