AMD: Let This One Work Itself Out - Barron's
Tweet
Share
E-mail
Get Alerts AMD Hot Sheet
Join SI Premium – FREE
Advanced Micro Devices (NYSE: AMD) had somewhat of an exciting after-hours yesterday.
The company announced the resignation of CEO Dirk Meyer. Chief Financial Officer Thomas Seifert will be acting as CEO on an interim basis.
Also, the company sees Q410 sales up 2% sequentially to $1.65 billion, compared to their previous forecast expecting sales to be about flat.
Looking to the future, Barron's questions whether or not AMD investors should leave or stay. They note that, as of the close yesterday, AMD shares were up over 25% in the last six-months, and "and have nearly quadrupled in the past two years." The stock goes for a forward P/E of 22x.
By comparison, Intel (Nasdaq: INTC) has only shown a 2% increase over the same period, and is currently trading at 11x forward earnings.
(Note: Intel is expected to report their fourth quarter earnings after the market closes. Stay tuned here.)
Two points Barron's makes: 1) They like Intel and their 3% dividend yield; and 2) they would resist the temptation to buy AMD on the dip.
One Wedbush analyst thinks that the untimely change at the helm will unsettle momentum that the company came in the year having. Based on their Q410 guidance, the analyst doesn't see too much downside in the stock right now.
On the other side, Sterne Agee believes that a misstep in the launch of their desktop-servers, scheduled to roll out in Q211, would give Intel a near-open door for market share gains (on top of the 95% they already possess). The analyst notes that AMD is also falling behind, as they are still working with their 32-NM Llano processor, whilst Intel is already launching their 24-NM Sandy Bridge Chip.
Additionally, Gleacher & Co. said, in defense of Meyer's decision to leave (they note that the Board would probably not leave the CEO slot open), that "in the near-term, we do not believe there is any risk to product roadmap or estimates...biggest problem for AMD remains ARM and server share."
Shares of AMD are trading 8.7% lower this afternoon.
The company announced the resignation of CEO Dirk Meyer. Chief Financial Officer Thomas Seifert will be acting as CEO on an interim basis.
Also, the company sees Q410 sales up 2% sequentially to $1.65 billion, compared to their previous forecast expecting sales to be about flat.
Looking to the future, Barron's questions whether or not AMD investors should leave or stay. They note that, as of the close yesterday, AMD shares were up over 25% in the last six-months, and "and have nearly quadrupled in the past two years." The stock goes for a forward P/E of 22x.
By comparison, Intel (Nasdaq: INTC) has only shown a 2% increase over the same period, and is currently trading at 11x forward earnings.
(Note: Intel is expected to report their fourth quarter earnings after the market closes. Stay tuned here.)
Two points Barron's makes: 1) They like Intel and their 3% dividend yield; and 2) they would resist the temptation to buy AMD on the dip.
One Wedbush analyst thinks that the untimely change at the helm will unsettle momentum that the company came in the year having. Based on their Q410 guidance, the analyst doesn't see too much downside in the stock right now.
On the other side, Sterne Agee believes that a misstep in the launch of their desktop-servers, scheduled to roll out in Q211, would give Intel a near-open door for market share gains (on top of the 95% they already possess). The analyst notes that AMD is also falling behind, as they are still working with their 32-NM Llano processor, whilst Intel is already launching their 24-NM Sandy Bridge Chip.
Additionally, Gleacher & Co. said, in defense of Meyer's decision to leave (they note that the Board would probably not leave the CEO slot open), that "in the near-term, we do not believe there is any risk to product roadmap or estimates...biggest problem for AMD remains ARM and server share."
Shares of AMD are trading 8.7% lower this afternoon.
Are you missing key trading opportunities? Upgrade to StreetInsider Premium and get a step ahead of the market - FREE TRIAL!
Create E-mail Alert Related Categories
Insiders' BlogRelated Entities
Sterne Agee, Barron's, Dividend, EarningsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
