AMD limps into 2018 after struggling to meet expectations
NEW YORK: For Advanced Micro Devices Inc (AMD) bulls, last year was a year to forget.
AMD finished the year dead last in the Philadelphia Semiconductor Index after quadrupling in 2016. The gains had catapulted the chipmaker to the best return among technology companies in the Nasdaq Composite Index. It also ratcheted up expectations for financial performance that AMD was unable to meet.
“Expectations are for them to have a significant beat, so there’s been some disappointments,” said Hans Mosesmann, a Rosenblatt Securities Inc analyst. “That’s why the stock is kind of languishing here.”
AMD was one of only four companies in the 30-member semiconductor index to lose value last year. Semiconductor stocks, led by Micron Technology Inc and Nvidia Corp, were among the year’s best performers with a 38 per cent gain.
Despite falling 9.4 per cent, AMD was still up more than 250 per cent since the beginning of last year and there are signs this year could be brighter.
The company was poised for further server design wins in coming months, said Macquarie analyst Srini Pajjuri in a note, upgrading the stock to “neutral” from “underperform”.
That hasn’t deterred bears from increasing bets against AMD. Nearly a quarter of outstanding shares were being utilised by short sellers, a 52-week high, according to Markit data.
Mosesmann expects the company to incrementally add market share over the next several years and foresees competitors like Intel Corp growing at a slower pace as a result. Bloomberg