After Intel’s epic stumble in the 7 nm arena, AMD received quite a boost. Despite winning analyst laurels and a steady rise in stock prices, the company has today received a rare downgrade from Northland Capital Markets, a provider of equity research and investment banking services.

To put it another way, Northland analyst Gus Richard, downgraded AMD today from ‘Outperform’ to ‘Market Perform.’ The analyst also set a stock price target of $80 for AMD, corresponding to a downside potential of 5.5 percent compared to the current pre-market price level of $84.40.

nasdaq amd stocks
Source – NASDAQ

Richard referred to a number of potential risks that necessitated the downgrading of AMD’s outlook. These include a likely decrease in demand for semiconductors from data centers in the second half of 2020 and an increasing penetration of ARM in the x86 processor segment. However, the analyst also cited the possibility of Intel turning towards a partnership with TSMC in the production of its 7 nm processors as a major contributor to today’s low-prognosis of AMD.

Bear in mind that Intel had announced, as part of its Q2 2020 earnings, that “the company’s 7nm-based CPU product timing is about six months ahead of its previous expectations.” Subsequently, on 27 July, DigiTimes cited sources that indicated the possibility for Intel to turn to TSMC in order to overcome issues with its 7 nm yield. It should be noted that the 7 nm node of Intel is equivalent to the 5 nm node of TSMC in terms of transistor density and yield. If this development were to bear fruit, Intel would be able to effectively address its 7nm-related issues, thereby avoiding the potential windfall that AMD is expected to generate.

Interestingly, Northland is currently somewhat lonely when it comes to its more somber AMD outlook. As an example, Cowen Inc. raised the company’s stock price target to $100 last week, highlighting AMD’s ‘roadmap consistency messages, execution reliability, and much closer cooperation with key customers’ that emerged during its talks with Lisa Su, CEO of AMD.

Even if Intel is able to overcome its 7 nm node deficiencies, AMD is determined to snatch a larger market share by launching new products. As an example, the company is currently working towards releasing its much-anticipated Big Navi (RDNA 2) GPU, codenamed Navi 21, by October 2020. AMD believes that the new GPU will bring the same level of disruption in the 4K gaming sphere as its Zen architecture in the CPU sphere. In addition, work on Navi 31 and Navi 41 GPUs has already begun.


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