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A Wall Street analyst showed himself cautious on Thursday Advanced micro systems (AMD), stating that investors have "irrational expectations" for AMD shares.
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Northland Capital Markets analyst Gus Richard downgraded AMD's performance in the market. He lowered his price target to 26 instead of 30.
AMD shares rose 1.2% to 32.59 on the stock market today. It reached its highest level in 12 years, or 34.14, on September 13th.
Richard said he still likes the company, but thinks the stock has gotten ahead.
AMD positioned to challenge Intel
"Our thesis has not changed, the assessment and feeling have changed," he said in a report to clients. "While we expect equities to continue to appreciate by December 31, we believe the stock price reflects irrational expectations."
AMD's strong design team and its intellectual property have positioned the chip maker for it to challenge the market leader Intel (INTC), he said.
AMD has a lot of cheerleaders on Wall Street. According to Zacks Investment Research, 12 companies rate AMD shares as large purchases, one as purchases, nine as reserves and one as solid sales.
Concerns about a downward cycle in the chip industry have put pressure on semiconductor stocks in recent months.
Xilinx Initiate Stock With Buy Rating
Elsewhere on Wall Street, brokerage firm Needham has initiated coverage of the chip maker Xilinx (XLNX) with a repurchase note and a price target of 100. It rose 2% to 79.90 on Thursday.
Quil Bolton, an analyst at Needham, said Xilinx should benefit from the growth of accelerated IT architectures, especially in data centers. Xilinx is the market leader in programmable gate array in the field and sees growth opportunities in FPGA platforms.
"We believe that the FPGA segment is entering a new phase of growth related to the adoption of accelerated computing," he said. "Based on a Needham proprietary survey of data center workload specialists, we believe that Xilinx is able to gain market share in the data center market."
Deployment of 5G wireless networks is also expected to boost Xilinx.
"These growth opportunities should allow Xilinx's revenue growth to accelerate over the next few years, while the overall growth rate in the semiconductor business is slowing," said Bolton.
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