Advanced Micro Devices, Inc. (NYSE: AMD), Intel Corporation (NASDAQ: INTC) – Why Intel CEO Transition is a Negative for AMD: Analyst

Intel company (NASDAQ: INTC) have responded positively to the company’s announcement regarding the appointment of VMware, Inc. (NYSE: VMW) Pat Gelsinger as CEO.

In a gesture of sympathy, the actions of rival chipmaker Advanced Micro Devices, Inc. (NASDAQ: AMD) pulled back as investors view Intel’s move as negative for the company.

AMD analyst: BMO Capital Markets analyst Ambrish Srivastava downgraded AMD from Market Performance to Underperformance and lowered the target price from $ 80 to $ 75.

The AMD thesis: AMD has done a “great” job under the leadership of Lisa Su, CEO, Srivastava said in the downgrade note.

The valuation of AMD shares reflected near-flawless execution under Su, the analyst said.

Intel’s missteps have opened up a “blue sky” scenario for AMD, helping it gain market share at Intel’s expense, pushing its valuation even higher, he said.

Related Link: AMD Analyst Projects Strong Start Until 2021 For Chipmaker

AMD’s server share gains are likely to be moderate in 2020, after which consensus estimates will turn out to be optimistic, Srivastava said.

BMO said its price target assumes AMD continues to trade at a high valuation, albeit below where it is currently trading.

The price target assumes that AMD shares are trading at a multiple of PE of 35 times the company’s 2022 calendar year EPS estimate, or $ 2.15.

AMD price action: AMD stock fell 1.08% Thursday, closing at $ 90.79, after falling 3.8% on Wednesday.

Related Link: Options Trader Bets $ 2 Million On Advanced Micro-Devices After CES Presentation

Photo: VMWare.