In a report published Friday, Morgan Stanley analyst Joseph Moore downgraded Advanced Micro Devices AMD from Equal-Weight to Underweight, and reiterated the $2.50 price target.
In the report, Morgan Stanley noted, “We had previously described our assumptions for AMD's console business in detail; we expected it to drive near term upside, but it is not a panacea for structural issues in the core business. After 93% YTD rise in shares, see risk-reward skewed to downside and move to UW. AMD's otherwise very solid 2Q results bring this issue home. With low initial yields, console op. margins per chip will be 10-12%, about half of our forecast, on larger revs. It should improve over time, but the near term upside is lower. We are still above consensus 4Q, but below for next year.”
Advanced Micro Devices closed on Thursday at $4.64.
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