Market Overview

AMD Has More To Lose Than Nvidia Should Bitcoin Mining Hardware Sales Decline

Share:
AMD Has More To Lose Than Nvidia Should Bitcoin Mining Hardware Sales Decline
Related AMD
An Electric Outlook For The Esports ETF
AMD Falls As Major Shareholder Sells
Here's Why Intel's Bull Run Isn't Over (Seeking Alpha)
Related NVDA
Why This Analyst Sees 25% Upside In NVIDIA
An Electric Outlook For The Esports ETF
The U.S. Week Ahead (Feb 25-Mar 1) (TalkMarkets)

The cryptocurrency craze has been a major tailwind for both Advanced Micro Devices, Inc. (NASDAQ: AMD) and NVIDIA Corporation (NASDAQ: NVDA). However, should cryptocurrency lose favor among investors, one analyst says AMD may have much more to lose.

The Analyst

Morgan Stanley analyst Joseph Moore maintains an Underweight rating and $8 price target for AMD stock and an Equal-Weight rating and $222 target for Nvidia.

The Thesis

AMD and Nvidia have been two of the hottest stocks on Wall Street in recent years, and surprise GPU demand from cryptocurrency miners has been largely responsible. According to Moore, that demand boost was likely only temporary, and could drop off significantly in 2018.

Moore said that, contrary to popular belief, bitcoin is irrelevant to graphics vendors because it moved to application-specific integrated circuit chips several years ago. Instead, most graphics-based mining is being driven by bitcoin rival Ethereum at this point.

“We believe that total graphics sales for Ethereum mining in 2017 will be $800 mn or so, and will decline by 50% in 2018; we can validate the 2017 number by looking at the increased complexity of the algorithm,” Moore said.

AMD Risks

While Nvidia has clearly defined its exposure to the cryptocurrency market and has assured investors that its projections incorporate downside risks, Moore said AMD has been tight-lipped about its cryptocurrency risks.

Moore says Ethereum mining is down 80 percent in the past four months and that it will soon shift to a technology called the Casper “hard fork,” that will render current Ethereum mining hardware obsolete.

Unless demand for other currencies picks up, it could be bad news for investors.

Price Action

AMD stock traded lower by 2.5 percent on Monday, while Nvidia shares dipped 1.3 percent.

Related Links:

A Look At Bitcoin's Weekend Crash

What Wall Street Thinks Of Nvidia's Huge Quarter

Latest Ratings for AMD

DateFirmActionFromTo
Oct 2018BairdMaintainsNeutralNeutral
Oct 2018BMO CapitalMaintainsMarket PerformMarket Perform
Oct 2018BarclaysUpgradesUnderweightEqual-Weight

View More Analyst Ratings for AMD
View the Latest Analyst Ratings

Posted-In: Bitcoin Etherium Joseph MooreAnalyst Color Top Stories Analyst Ratings Tech Trading Ideas Best of Benzinga

 

Related Articles (NVDA + AMD)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
CJefferiesUpgrades73.0
INTCMorgan StanleyUpgrades0.0
SOEvercore ISI GroupUpgrades0.0
ADBEDZ BankDowngrades0.0
AVGOCowen & Co.Downgrades0.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Survey Says Autodesk Is Likely To Benefit From Consumer Trends

Is Amazon Worth $1 Trillion? Morgan Stanley Does The Math