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StockBeat- AMD Slumps as Mizuho Warns of 'Limited Upside'

Investing.com – Advanced Micro Devices (NASDAQ:AMD) shares slid on Thursday as Mizuho called time on the chipmaker’s dramatic rally, citing “limited upside” ahead.

Mizuho downgraded its rating on AMD (NASDAQ:AMD) to neutral from buy, sending its shares nearly 2% lower by 2:13 p.m. ET (18:13 GMT).

The downgrade, however, does little to dent the AMD’s growth story given its solid portfolio and product ramps, the bank suggested. But, with the chipmaker's shares boasting gains of more than 80% so far this year, well above the 31% rally in the Philadelphia Semiconductor Index, further upside in the second half of the year could be hard to come by.

“With the stock past our price target and at [a] 10-year high, we see 2H upside more limited,” Mizuho said.

Mizuho analyst Vijay Rakesh cited several reasons for its somber outlook on AMD, including a slower ramp up of the company’s “Rome” product stack and expectations for a subdued pick up in second-half server and spending combined with Intel (NASDAQ:INTC) pricing pressure. He did raise his price target on the stock to $37 from $33. That's higher than the $31.07 consensus price target among analysts polled by Investing.com.

In response to AMD’s line-up of Ryzen desktop processors, released July 7, rival Intel (NASDAQ:INTC) has cut prices of some its processors by as much as 15%.

AMD has been scooping up new business at the lower end of the market, following Intel’s decision to de-prioritize shipments of low-end CPUs after a ramp up in activity in its data center-related businesses weighed on its ability to churn out processors.

Intel (NASDAQ:INTC) shares are up just 5% this year.

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