The road ahead for AMD may be a rocky one as some of the company's key markets could see slowdowns, according to Barclays. Analyst Blayne Curtis downgraded AMD to equal-weight and lowered its price target on the stock to $115 from $148, which is 3.5% below Wednesday's close price. Curtis cited "cyclical risk across several end markets," including PC and gaming, in 2023. "We would rather move to the sidelines until we have better clarity as to the magnitude of these corrections and what the competitive landscape will look like as INTC catches up and ARM takes more share," Curtis explained. "The core issue here is what will be AMD 's growth trajectory coming out of this potential correction." AMD shares fell more than 8% after the downgrade Thursday. While AMD could see 31% upside growth this year, Curtis sees ongoing risks to gaming and PC markets, which benefitted from hybrid work-from-home trends and pandemic lockdowns. Since the start of 2020, AMD shares have more than doubled — rising 160% in that time. The stock has struggled this year, however, falling 17% as the pandemic continues to disrupt supply chains in the semiconductor sector. "We understand the argument that the number of PCs per person/household should increase due to prolonged hybrid working, but we don't believe that trend is enough to sustain the market at these levels," Curtis wrote. Barclays adjusted earnings per share estimates on AMD for this year and 2023, lowering them to $4.02 and $4.53, respectively. Previous estimates expected $4.10 per share in 2022 and $4.75 next year.
Lisa T. Su, CEO of Advance Micro Devices
Adam Jeffery | CNBC
The road ahead for AMD may be a rocky one as some of the company's key markets could see slowdowns, according to Barclays.