Market Overview

AMD's Stock Off To Rough October Start Following Best Quarter In Decades

AMD's Stock Off To Rough October Start Following Best Quarter In Decades

For the second straight day, Advanced Micro Devices, Inc. (NASDAQ: AMD) and Intel Corporation (NASDAQ: INTC) are on the move following a note from BlueFin Research suggesting Intel’s 10nm chips could be in production sooner than expected.

What Happened

AMD stock has gained more than 200 percent in 2018 and just came off its best quarter in nearly 30 years in the third quarter on hopes that Intel’s production issues would create a major opportunity for AMD to gain market share. However, BlueFin’s report indicates AMD’s window of opportunity may be closing fast.

Intel’s previous statements that the 10nm chips would be available by the 2019 holiday season may be on the conservative side, according to BlueFin's Steve Mullane.

“Currently, the semi material and equipment suppliers are prepping for the ramp to begin in June 2019, but several suppliers have had informal discussions on the possibility that the ramp could be pulled in by 4-6 weeks,” Mullane said in the note.

Why It's Important

Intel shares have gained 3.5 percent so far this week, while AMD's stock has tanked 12 percent. Graphics card competitor NVIDIA Corporation (NASDAQ: NVDA) is up about 1.2 percent this week.

Some of the AMD selling may simply be traders taking profits on AMD’s massive 2018 gains, but other investors may be concerned AMD is simply priced for a perfection that will be difficult to deliver.

What's Next

MKM Partners analyst Ruben Roy said Tuesday AMD has done an admirable job in executing its product strategy, but there’s plenty of risk in the stock at its current levels.

“With valuations reflecting the best possible scenario, we think that there could be better opportunities coming up if there are hiccups,” Roy said.

​​​​​​While AMD struggles, Intel kicked off Q4 by closing above its 50-day moving average on Tuesday for this first time since mid-June.

AMD traded around $27.21 at time of publication, down 6.2 percent on the day. Intel shares were up 1.3 percent at $48.74.

Related Links:

Intel Adding $1B To CapEx To Boost Production

Northland Downgrades AMD On 'Irrational Expectations'

Latest Ratings for AMD

Jan 2021Cowen & Co.MaintainsOutperform
Jan 2021BMO CapitalDowngradesMarket PerformUnderperform
Nov 2020Wells FargoUpgradesEqual-WeightOverweight

View More Analyst Ratings for AMD
View the Latest Analyst Ratings


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