Markets

Is AMD's Slide a Buying Opportunity?

AMD's Stock Has Fallen by 20% in Past 3 Weeks

Source: Google Finance

AMD's ( AMD ) stock has been skidding lower, which we originally attributed to macroeconomic concerns in the U.S.; however, it seems that investors are concerned about AMD's outlook in particular.

AMD has finally released its Llano chips for PCs that combine the power of GPU and CPU on the same chip that will compete directly with Intel's (NASDAQ:INTC) Sandy Bridge processors. What this means is that AMD will now have a better chance against Intel, and integrated graphics business for companies like Nvidia (NASDAQ:NVDA).

Investors Worried Over Weak PC Market and CEO Replacement

ource: http://www.microsoftoffice2010forums.com, Goldman Sachs Estimates

Investors seem worried the outlook for the PC market that has slowed down contrary to prior estimates as well as delays in announcing a new CEO.

According to research firms like Gartner, the PC market has slowed down contrary to earlier expectations in part due to cannibalization by tablets. Given that AMD's recent efforts like launching Llano cater to the PC segment, investors seem a little unsure.

AMD's Sharp Sell Off Creates Opportunity to Bounce Back

AMD Vs Intel

Source: GizmoWatch

If we look at the change over last week or so, AMD's stock has been punished more by investors that its rival Intel (NASDAQ:INTC) despite the fact that PC market weakness affects both.

While AMD's high leverage could partially be the reason behind greater downfall of the stock, it also implies that stock has opportunity to recover over time and might present an attractive investment right now.

New Llano Chips Can Support Recovery

AMD Fusion APUs

Source: eyecandyhardware.blogspot.com

AMD's launch of the Llano chips directly competes with Intel's Sandy Bridge and could help the company to make further inroads into notebook market and gain a greater share.

HP (NYSE:HPQ) is making a significant marketing push with new notebooks powered by AMD. In addition to this, an analyst from FBR has upgraded AMD to outperform the market mentioning his positive expectations regarding AMD's share gains in PC market.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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