Micron Shares Initiated Outperform, AMD Neutral at SMBC Nikko

SMBC Nikko analysts kicked off coverage of Advanced Micro Devices (AMD) and Micron Technology (MU)  with significantly different takes on the semiconductor giants.

The firm initiated Micron at outperform and a price target of $62, above the $53.86 average target of analysts surveyed by Bloomberg.

It was more tempered in its assessment of AMD, opening coverage with a neutral rating and a $36 target, also the price-target average of $33.17.

Advanced Micro shares fell 0.5% to $35.96 a share, while Micron, despite the outperform rating, dropped 2% to $47.69.

The drops in Advanced Micro and Micron come amid a larger debate among analysts and other observers about whether the semiconductor industry has finally bottomed out amid a current down cycle, or still has some distance to go.

On the side of the bulls, Rosenblatt Securities last week hiked its price target of AMD to $52 a share from $42. At the time that was the highest target of any analyst surveyed by FactSet covering the stock.

“The setup for the company is for continued momentum into 2020 on broad-based desktop and server 7-nanometer deployments, continued 12-nanometer notebook traction (7 nanometer next year), and a new game console cycle that is a bit stronger than we have been modeling,” wrote Rosenblatt analyst Hans Mosesmann.

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