In a recent report released on Monday, Morgan Stanley reduced its price target for AMD (NASDAQ:) (Advanced Micro Devices) stock from $193 to $177. The financial institution maintained its positive Overweight rating on the shares.
The investment bank said that despite reservations about some long-term aspects, it has a positive view of the company and its actions for the long-term future. However, he identified a changing outlook regarding the company’s earnings.
“Advanced Micro Devices is considered one of the most controversial stocks this earnings season, with mixed performance in key business areas and uncertainty about the future, particularly in artificial intelligence, related to NVIDIA’s upcoming Blackwell processor,” commented the Morgan Stanley analysts. “We remain positive about the future, but the current quarter is not expected to be a significant driver due to these issues.”
Looking at the company’s core businesses, analysts expect Advanced Micro Devices’ guidance for the first and second quarters to align with expectations.
“The personal computer market appears to be slightly weaker than usual as we approach the second quarter, but the server market is expected to be stronger. The performance of the recent acquisition of Xilinx is reaching its nadir,” he added Morgan Stanley. “Financial results for the second half of the year will depend on a turnaround in Xilinx’s performance, which has not yet been observed, or strong results in other sectors. We expect some potential challenges for the second half of the year” .
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Furthermore, despite ongoing uncertainties in the field of artificial intelligence due to NVIDIA’s upcoming Blackwell processor and its aggressive pricing strategy, the bank’s position remains unchanged.
In conclusion, Morgan Stanley believes that Advanced Micro Devices has demonstrated adaptability and expects the company to be able to respond effectively with its products.
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