AMD stocks already reflect good news and may fall, analyst says

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Advanced Micro Devices (ticker: AMD) stocks could fall because many good news are already priced at their stock price, according to Susquehanna.

AMD

creates processors that act as the main brain for competing computers, servers and graphics cards
Intel

(INTC) and
Nvidia

(NVDA).

It's slated to report the results for the first quarter on Tuesday.

Bakhistorien. The AMD share has risen about 50% this year, as investors are growing optimistic about the company's product pipeline later in 2019.

Later last year, AMD announced that its next-generation seven-meter (nm) server chip, called Rome, would be introduced in mid-2019. Intel's first chips based on 10-nm technology will not be shipped to the 2019 season.

What's new. Susquehanna analyst Christopher Rolland repeated his neutral rating for AMD shares on Monday, citing the high expectations of the market for the chipmaker's financial performance later this year. "New products and stock gains can help them cross this gap," even though we are still skeptical of expectations, "he wrote." We remain on the sidelines at the moment as expectations and valuation entail additional stock gains, which we will see to verify before they become more constructive. "

AMD shares were up 0.6% to $ 28.05 on Monday.

The analyst quoted AMD's lack of consistent profitability in the past, noting the chip maker had a median enterprise value-to sales multiple of 0.9 times since 2005 versus 4.3 times today Business value is a measure of the company's total value, often used as a more comprehensive alternative to capital market values, so a higher majority of sales means the stock is more expensive

Looking ahead Rolland confirmed its $ 26 price target for AMD shares, representing 7% disadvantages to today's price.

Write to e Kim at tae.kim@barrons.com