Goldman Sachs Downgrades AMD to Neutral, $129 Price Target

Goldman Sachs analyst Toshiya Hari downgraded AMD (NASDAQ: AMD) from Buy to Neutral with a price target of $129 (from $175).

“Although we remain constructive on the company’s ability to take share from Intel in x86-based compute across PCs and traditional servers, we are increasingly concerned that the rise of Arm-based custom CPUs coupled with the competitive intensity in accelerated computing will a) weigh on AMD’s revenue growth relative to peers, b) exert upward pressure on AMD’s opex profile and, c) in turn, weigh on the stock’s multiple.

Since being added to the Buy list on 11/04/2020, the stock is up 50% vs. the SPX at +72% over the rating-to-date period.

We believe the underperformance was driven by weakness in PC and traditional end-demand as well as, more recently, slower-than-expected growth in Data Center GPUs.

We now believe the stock will remain range-bound on a relative basis until the market regains confidence in AMD’s future growth and margin trajectory.”

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