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Analysts Worry That Crypto Could Hurt Advanced Micro Devices, Inc. (AMD)

AMD – AMD’s crypto impacts have some analysts concerned.


Advanced Micro Devices, Inc. (NASDAQ:AMD) shares have surged over 50% this year, riding the wave of higher GPU demand.

While gaming and data center applications are the primary drivers of that demand, cryptocurrency’s impact has to be mentioned as well. Crypto miners use GPUs running 24/7 to mine digital currency, but as MarketWatch reports, analysts are getting concerned that demand might be waning:

AMD’s Vega GPUs have been a star for the company lately, but Bernstein analyst Stacy Rasgon wrote that Vega initially proved disappointing for investors until the recent crypto boom.

“Given AMD’s GPUs have been preferred for mining, and GPU supply in general to gamers was constrained industry-wide, we believe it is plausible that much of AMD’s GPU ramp has benefitted miners, rather than gamers, over this period,” Rasgon said.

Meanwhile, Morgan Stanley’s Joseph Moore reiterated his bearish stance on the stock this week, citing similar crypto concerns. “Cryptocurrency strength has to some degree offset the slow and steady progress establishing momentum in desktop and server microprocessors after several years away from those markets — but that higher revenue has driven higher operating expense, which further raises the bar for the processor business if crypto momentum should fade,” Moore wrote. He added that AMD is “facing an imminent Nvidia product launch that they may not have an answer to for another year,” he wrote.

Advanced Micro Devices, Inc. shares closed at $15.80 on Friday, up $0.15 (+0.96%). Year-to-date, AMD has gained 53.70%, versus a 3.83% rise in the benchmark S&P 500 index during the same period.

AMD currently has a StockNews.com POWR Rating of B (Buy), and is ranked #29 of 95 stocks in the Semiconductor & Wireless Chip category.

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