On Thursday AMD shares experienced a sharp decline by as much as 14.4 percent, shortly after Goldman Sachs analyst James Covello cut his rating to sell from neutral. He expects that despite some positive trends like big console wins, AMD is likely to underperform in 2014. Covello doesn't see AMD’s massive spring rally as justified.
“As has been the case with many of the other rallies in AMD, which have all faded, ultimately, the numbers do not justify the move in the stock ... we expect continued disappointing results in the PC segment to mitigate the impact of increased revenue from gaming." claims Covello.
However, here at Fudzilla we are quite confident that AMD will do well in 2013, and that its worst days are behind it. The company has Playstation 4 and the new Xbox design wins, it has a solid graphics portfolio and it plans to introduce Richland and Jaguar based products already in June. When it comes to the second part of the year, AMD has more to offer and with a few strong OEM designs, so it should do well. It even gained some market share in servers with Opteron 6300 for Facebook's modular Open Compute server platform.
The fate of AMD is very much linked to the fate of Intel, or the x86 market in general. Despite current market trends, consumers shifting to tablets, we are confident that notebooks and even desktops and will continue to play an important role in our lives. Let’s not forget about servers, either. Something has to power that massive cloud, even if the cloud itself is used by tablets and smartphones.
At this point you simply cannot do most of your every day's work on any tablet, including fancy iPads and hybrid tablets with proper keyboards. Hybrids powered by x86 processors are the way to go for AMD and Intel. Dockable tablets with enough muscle to cope with productivity apps might be the future of computing, provided Microsoft ups its game with Windows 8.1.