This AMD Bear Is No Less Bearish Ahead Of Q3 Earnings

Advanced Micro Devices, Inc. AMD has launched a series of new products in 2017 that have investors excited about the company’s future in a robust semiconductor market. However, Citi analyst Philip Lee isn’t so impressed by AMD’s new line of Ryzen CPUs and says Intel Corporation INTC’s recently launched Coffee Lake CPUs have widened Intel’s performance advantage over AMD.

Lee cited new tests that suggest Coffee Lake CPUs have a 21 to 23 percent performance advantage over Ryzen CPUs. Intel’s previous CPU product, Kaby Lake, had just a 10-percent performance advantage.

Lee said Coffee Lake is just the tip of the iceberg, and AMD investors should be prepared for a wave of new marketplace competition. He said the performance gap between Intel and AMD will likely continue to widen with the next generation of processors.

Citi is expecting AMD’s unit share to increase when the company reports third-quarter earnings on Oct. 24. However, Lee said these gains will not be sustainable in the long term. Lee reiterated Citi's Sell rating on the stock.

“Despite new products, AMD is still losing money [and] we see no change in sight as it fall further behind the competition,” he said.

Back in September, Susquehanna’s quarterly semiconductor report indicated that AMD gained both GPU and CPU market share in the third quarter. However, Susquehanna said most of AMD’s gains came at the expense of NVIDIA Corporation NVDA rather than Intel.

Heading into Q3 earnings season, Susquehanna prefers semiconductor investors choose Positive-rated Intel and Marvell Technology Group Ltd MRVL over Neutral-rated AMD and Nvidia.

Related Link: AMD, Marvell Gain Semiconductor Share In Q3