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AMD Sells Off As Tesla Rumor Cools Down; Analyst Calls Partnership 'Completely False'

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AMD Sells Off As Tesla Rumor Cools Down; Analyst Calls Partnership 'Completely False'

Advanced Micro Devices, Inc. (NASDAQ: AMD) stock jumped nearly 8 percent from around $13.00 to above $14.00 this week after a report surfaced that the company was partnering with Tesla Inc (NASDAQ: TSLA) to develop an autonomous vehicle chip that utilized artificial intelligence technology. The reports took the market by surprise, especially since Tesla already has a partnership in place with AMD rival NVIDIA Corporation (NASDAQ: NVDA).

However, the rally was short-lived as the market began to doubt the report’s validity.

On Thursday morning, Reuters reported AMD partner GlobalFoundries denied claims the company has been working directly with Tesla.

“Tesla has not committed to working with us on any autonomous driving technology or product,” a GlobalFoundries spokesperson said.

One of the first market analysts to cry foul was Global Equities Research analyst Trip Chowdhry. In an email to clients on Thursday afternoon, Chowdhry called the Tesla-AMD partnership “completely false.”

“The rumors that TSLA will be using AMD chips in its autonomous driving initiatives are 100% false,” Chowdhry wrote.

Chowdhry reminded clients that Tesla’s recently-renewed deal with Nvidia is in place for five years. Chowdhry even took his dismissal of AMD one step further, saying that AMD will not be a significant player in deep machine learning technology. He said Nvidia will be the dominant name in the GPU category, and Intel Corporation (NASDAQ: INTC) will be the top name in the CPU category.

According to Chowdhry, the rest of the players “will be in the ‘others’ category, which will be about 10% of the market.”

AMD stock was trading at around $13.20 in Friday’s pre-market session, having given up most of its gains following the original report.

Related Link: Tesla-AMD Partnership Likely A 'Modest' Negative For Nvidia, But Its Competitive Moat Still Substantial

Latest Ratings for TSLA

DateFirmActionFromTo
Sep 2020WedbushMaintainsNeutral
Sep 2020Piper SandlerMaintainsOverweight
Sep 2020Deutsche BankMaintainsHold

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View the Latest Analyst Ratings

 

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