AMD downgraded to Neutral from Buy at Goldman Sachs

Goldman Sachs analyst Toshiya Hari downgraded AMD (AMD) to Neutral from Buy with a price target of $129, down from $175, representing 6% potential upside from current levels. The firm remains constructive on the company’s ability to take share from Intel (INTC) in x86-based compute across PCs and traditional servers, but is increasingly concerned that the rise of Arm-based (ARM) custom central processing units, coupled with the competitive intensity in accelerated computing, will weigh on AMD’s revenue growth relative to peers. This will exert upward pressure on AMD’s spending profile and, weigh on the stock’s multiple, the analyst tells investors in a research note. Goldman believes the stock will remain range-bound on a relative basis until the market regains confidence in AMD’s future growth and margin trajectory.