Today's video focuses on Advanced Micro Devices (AMD -2.94%) and a recent analyst downgrade that could have caused the stock sell-off on Thursday morning. One of the reasons for the downgrade is the potential slowdown in specific markets for AMD. Shockingly enough, there are some bearish points I agree with, but is it enough reason to sell? I think not. Here are some highlights from the video.
- On March 31, Barclays analyst Blayne Curtis downgraded AMD to equal weight from overweight and dropped its price target to $115 from $148. One of the reasons for the downgrade is the potential slowdown in the gaming, PC, and graphics markets.
- Micron Technology (MU 0.10%) announced its most recent earnings this week and provided an in-depth look into the tech market. Micron informed investors that the following three markets are still experiencing strong growth: data centers, industrial, and automotive. AMD already provides solutions for data centers, but now with its most recent acquisition of Xilinx, it also provides solutions for the automotive and industrial markets. Unfortunately, Micron has seen a slowdown in the consumer PC market.
- Right now is a tricky time for semiconductor investors, as some markets might be slowing down. For example, the consumer PC market, but others like the data center, automotive, and industrial markets continue to grow. The best question is not when the slowdown will happen but if the growth in other markets can offset that slowdown. Unfortunately, only time will tell.
Click the video below for my full thoughts and analysis.
*Stock prices used were the market prices of March 31, 2022. The video was published on March 31, 2022.