AMD Loses A Bull: Mizuho Points To Valuation, Limited Upside In Downgrade

Advanced Micro Devices, Inc. AMD shares are up about 82% year-to-date, with the stock hitting a 52-week high of $34.86 on Tuesday.

The Analyst

Mizuho Securities analyst Vijay Rakesh downgraded AMD from Buy to Neutral and increased the price target from $33 to $37.

The Thesis

Notwithstanding a solid Ryzen/Rome portfolio and new product ramps, AMD's 80%-plus year-to-date run and the scope for limited upside potential in the second half led to Thursday's downgrade, Rakesh said in a note. (See his track record here.) 

Significantly strong PC shipment trends in the June quarter reflect a pull-in from the September quarter ahead of tariff concerns., the analyst said.

This — in addition to the seasonally flattish December quarter — presents less opportunity for top-line upside in the second half, he said. 

Despite AMD starting 7nm production Rome shipments in June, Rakesh said he believes server ramps with hyperscale OEMs heading into the third quarter are still slow.

"We believe AMD SepQ/DecQ Server share gains and associated GM upside could be limited ahead of volume ramps and 1H20 INTC 10nm ramp versus prior expectations." 

Mizuho raised its June quarter revenue and EPS estimates above the consensus, while trimming the September quarter guidance.

"We would revisit at a more attractive entry point as we believe L-T 7nm Server/DT roadmap still intact." 

The Price Action

AMD shares were slipping by 2.44% to $32.78 at the time of publication Thursday. 

Related Links:

RBC Says AMD Is High Beta Name To Own For 2019: 'It's Profitable To Buy The Stock On Down Days'

Analysts Impressed With AMD's Execution, Pipeline Following Solid Q1 Results

Posted In: Mizuho SecuritiesVijay RakeshAnalyst ColorDowngradesPrice TargetAnalyst RatingsTech

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.