Goldman puts AMD on ‘Sell’ list, predicting more losses this year
By APTuesday, February 2, 2010
Goldman puts AMD on ‘Sell’ list
NEW YORK — Goldman Sachs added Advanced Micro Devices to its “Conviction Sell List” on Tuesday, predicting more sizable losses for the chip maker this year.
AMD made its first profit in three years in the fourth quarter of 2009 because of a $1.25 billion legal settlement from rival Intel Corp., the world’s biggest provider of chips for personal computers. But the company would have lost about $57 million, otherwise.
“We expect the company to continue to generate sizable losses in 2010,” Goldman analyst James Covello told investors in a note.
He said the company will suffer from its exposure to the low-end desktop business and may lose ground to competition in the server market.
Covello noted that AMD shares have more than tripled over the past year, an indication investors have already taken account of the broader recovery in computer sales.
He reiterated a price target of $5.50, which would be a roughly 30 percent drop from the current share price.
Shares of Advanced Micro Devices Inc. fell 13 cents, or 1.6 percent, to $7.85.
