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The shares of Advanced Micro Devices Inc. posted their best quarter since 1991, but the arrival was not without a bit of drama.
AMD
AMD, -5.25%
Stock
AMD, -5.25%
fell 5% in Friday's session, the last trading day of the quarter, after rival Intel Corp.
INTC, + 3.08%
has published an update on supply issues as well as progress on the company's 10-nanometer chips. AMD's shares continued to grow 106% quarter-on-quarter and are on track to record their largest quarterly gain since the March 1991 quarter, when equities rose 115%.
Part of AMD's file concerns Intel's missteps, and the company's Friday commentary says a little more about its current situation. In an open letter, Intel Acting General Manager Bob Swan said the company still expected to have "at least" enough resources to meet its full-year revenue target. .
"Yields are improving and we continue to expect volume production in 2019," said Swan.
Intel expects to meet the outlook for the year due to supply constraints, the drop in AMD inventories
The other part of Intel's statement was about new chips on the horizon. Intel has generally been ahead of AMD with its technology, but has experienced delays with 10-nanometer technology at a time when AMD was running well. The Bulls have argued that AMD is poised to capitalize on Intel's difficulties with its own 7-nanometer server processor and weaken Intel's long-standing benefits.
Read: AMD action reflects "irrational expectations"
Stacy Rasgon, an analyst at Bernstein, said that the fall of AMD's shares following Intel's latest comment was "rather interesting," because Intel's rating "does not rule out the possibility that AMD will take advantage of the current situation". on more efficient processors and that its supply was still "tight" at the entrance.
"AMD processors in general still tend to be cheaper, but they may still have an opening in today's environment," Rasgon writes.
While Intel's latest statement did not contain any new information about 10 nanometers, Wells Fargo analyst Aaron Rakers could see why Wall Street saw it as positive for Intel as "the 10-nanometer ramp" problems d & # 39; supply.
Intel's commentary started AMD's recovery, but the stock is still on track for its fourth best quarterly performance over 46 years as a public company. The recovery was fueled by the hope that AMD's share in desktop and laptop chips and server products, as well as the increased optimism of Wall Street's most optimistic analysts.
At least three analysts have raised their AMD price targets to $ 40, the highest target listed on FactSet, but the sentiment with regard to AMD remains mixed. Of the 33 analysts who cover stocks, 14 have buy ratings, 14 have holding ratings and 5 have sell ratings. The average price target is $ 24.29, 22% lower than current levels.
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