Canaccord analyst Matthew Ramsay weighed in today with a few insights on Advanced Micro Devices, Inc.(NASDAQ:AMD), after hosting a day of investor meetings in Toronto with Matt Skynner, Corporate VP & GM of AMD’s Computing and Graphics business; Wissam Jabre, Corporate VP of Finance; and Liz Morali from IR. The analyst walked away with concerns about the overall macro environment near-term but intrigued by AMD’s long-term innovative product roadmaps for both GPU and x86 cores.
Ramsay wrote, “Overall, we believe AMD’s diversification strategy continues to show gradual progress and a refreshed roadmap could position the company for more defensible long-term sales. However, AMD has not been able to stem the decline of its Computing & Graphics business – down ~46% Y/Y in 1H/15 – especially as the PC market has weakened following a stronger 2014. While yet another restructuring, the SeaMicro business exit, and more reliance on NRE-funded R&D should lower operating expenses to manage gross cash within the target range as new products launch, we worry PC headwinds will persist through 2016 and AMD’s most important new products will likely not ramp for another 18 months.”
Furthermore, “Competitors Intel and NVIDIA continue to innovate on their roadmaps and maintain scale advantages. Despite believing in the leadership under AMD’s new CEO Lisa Su, we continue to wait for tangible signs of core business stability or new product inflection before becoming more constructive on shares.”
The analyst aintained a Hold rating on AMD stock, with a $2.00 price target, which implies an upside of 8.1% from current levels.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Matthew Ramsay has a total average return of 0% and a 42.7% success rate. Ramsay has a -33.1% average return when recommending AMD, and is ranked #2565 out of 3743 analysts.
Out of the 21 analysts polled by TipRanks, 4 rate Advanced Micro Devices stock a Buy, 10 rate the stock a Hold and 7 recommend Sell. With a return potential of 47.5%, the stock’s consensus target price stands at $2.73.