Morgan Stanley reiterated its price target for shares of Advanced Micro Devices (AMD) of USD 176, but cut the rating “overweight” to “equiponder”.
The bank’s specialists indicated that Investor expectations for AMD’s artificial intelligence (AI) business seem too high. In other words, they attacked the company’s current valuation.
In turn, they maintained that AMD stock looks very expensive compared to Nvidia and Broadcomtwo chipmakers that are most likely to see upward revisions to their AI units.
At the moment, AMD Trades at 50 Times Estimated Earnings, being the third most expensive component of the Philadelphia Stock Exchange’s semiconductor index. For its part, Nvidia has a ratio of 36 times, Broadcom is worth 30 times projected earnings and Super Micro Computer, which rose more than 1,000% in the last twelve months, is trading at 41 times.
“It is valued for perfection in the short term, and with these multiples I am not willing to spin the roulette wheel for what could happen in the long term”commented Thomas Hayespresident and managing member at Great Hill Capital, citing the free cash flow decline and expanding multiples. “That will always be a formula for a surprise”he added.
Anyway, much of the market still trusts in AMD’s potential. On average, Wall Street analysts set a price target for its shares of $188, which would imply a up 17% from current range.
Invest in AMD from Argentina
For those interested, From Argentina you can invest in AMD quickly and easily. All you have to do is open a client account in a brokerage company regulated by the National Securities Commission such as Bull Market Brokers, a free process that will not take more than five minutes, and, after depositing the desired funds, acquire cedars.
Cedears or Argentine Deposit Certificates are instruments that are equivalent to buying the underlying stock listed abroad (NASDAQ: AMD), but they can be traded in pesos (BCBA: AMD) and follow the evolution of the CCL dollar, so they allow evade the Argentine risk and, at the same time, hedge against a possible exchange rate jump.
