Just when you thought it couldn't get any worse for Advanced Micro Devices , Banc of America kicks the company when it's down, right in the teeth. And the report is sending a shudder through all of big-cap chip stocks.
AMD lost 62 percent of its value last year and despite such a steep sell-off, it's still not a good deal, says Sumit Dhanda, Banc of America's chip analyst. That's brutal. These shares are hanging on to the $7 a share level by a thread, threatening to dip into the $6 range. These are levels this stock hasn't seen in almost 4 years, with the report this morning slapping a new, $5 target on AMD. And the company now commands a "sell" rating by the firm. Ouch.
This is particularly disheartening since AMD poured so much attention into its next-generation Barcelona technology. I talked with the company's CEO Hector Ruiz at the chip's release and he was extremely excited about the prospects.
He acknowledged his frustration surrounding the chip's long-running delay but said at the time that the time for pointing fingers had passed; that the company was focused instead on getting this technology into the marketplace. Well, now it's finally there and the company is still getting slammed.
Thank Intel for much of these problems. The company was able to capitalize on AMD's ongoing problems, but it too suffered a BofA downgrade this morning. In fact, AMD and Intel joined National Semiconductor, Texas Instruments,LSI Logic,Analog Devices,Power Integrations and Semtech in the downgrade parade.