Advanced Micro Devices Inc. it probably wouldn’t be immune to the effects of a recession, but Northland Capital Markets analyst Gus Richard said the risk is already built into AMD’s stock price.
Although it reduced several estimates about AMD AMD,
On Thursday and lowered its target price to $ 95 from $ 97, it also became bullish on stocks, improving them to outperform the market.
Richard noted that AMD shares have fallen by about half compared to the November high, and has also dropped a key valuation metric. Shares currently trade at 16 times the estimates for 2023, compared to estimates 32 times in 2023 earlier this year.
“We believe there are now macro headwinds in our estimates and stock price,” he wrote.
Richard now expects AMD revenue from PC CPUs to fall 6% next year, while GPY revenue could drop 7%. “AMD on server CPUs is at the top of the stack next year, we believe AMD will have little impact on this business at CY23,” he added.
Overall, Richard models CPU and GPU revenues falling by a combined $ 675 million year-on-year in 2023. In addition, he expects Xilinx revenue to decline 6% “compared to apples to apples,” but noted that AMD closed its acquisition of Xilinx in the middle of the first quarter, so it believes that Xilinx’s revenue will increase by $ 250 million by 2023. And while it believes that revenue from gaming consoles could increase by 8% next calendar year, reduced their own estimates. for the category for $ 740. Finally, it models a 55% increase in business revenue, which equates to an increase of $ 3.1 billion.
“We believe these estimates are a low bar for the company,” he wrote.
Shares of AMD were down 0.7% on Thursday trading. They have fallen 35% in the last three months as the S&P 500 SPX,
has dropped 18%.