AMD Pulls Back After Monday's 9% Rally — Why The Stock Is Reversing In Premarket

Advanced Micro Devices Inc. shares are giving back some of their Monday's gains achieved on the back of a positive analyst action.

What Happened: In premarket trading, the stock shed 2.33% to $74.75, according to Benzinga Pro data.

Bernstein analyst Stacy Rasgon downgraded AMD shares from Outperform to Market Perform and reduced the price target from $95 to $80. This is an about-face from nearly a year ago when the firm upgraded the stock, citing the company’s growing market share and strong portfolio of computer chips as well as the stock’s relatively cheap valuation.

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Rasgon's downgraded opinion comes amid a deterioration in the PC market. Market research firm Canalys’ survey showed PC shipments fell 16% in 2022. The firm also warned of challenging conditions to persist through the second half of 2023.

On Monday, AMD rallied 9.22%, capitalizing on Barclays’ upgrade of the shares from Equal-Weight to Overweight and increasing the price target from $70 to $85. The firm premised its optimism on AMD’s lead over rival Intel Corp. INTC in the server market following the launch of the Genoa data center product.