Analysts Concerned about How Cryptocurrency Production Affects the Value of AMD Shares


According to MarketWatch, despite the growth of shares of Advanced Micro Devices Inc. (AMD) in connection with the popularity of mining, analysts are sure that investors can be very disappointed if the production of cryptocurrency is lost.

Over the past month, AMD shares grew by about 30% thanks to the company’s production. Due to the sale of GPUs popular among miners, AMD’s share price only increased 30% last month. Despite this, many analysts are concerned about the fact that such a situation may not last long. The company can incur large losses if the miners choose a GPU from another manufacturer or the cryptocurrency will be closed.

The analyst from Bernstein Stacy Ragon says that GPU from AMD company became popular among miners in connection with cryptocurrency boom, but initially, the equipment was intended for computer games. It is worth noting that the supply of GPU for games was limited in the whole industry. She is sure that if users prefer equipment from another manufacturer, AMD “could suffer not only unit shortfalls in a crypto decline but also ASP (average selling price) pressures if mix trends down, potentially exacerbating any effects.”

Joseph Moore from Morgan Stanley is sure that in the current situation, when the cryptocurrency is extremely popular, probably Nvidia will release its own processor and, most likely, AMD will not be able to resist them:

“Cryptocurrency strength has to some degree offset the slow and steady progress establishing momentum in desktop and server microprocessors after several years away from those markets — but that higher revenue has driven higher operating expense, which further raises the bar for the processor business if crypto momentum should fade.”

It should be noted that since the beginning of the year AMD shares have grown by 61%. At the moment the cost of one share is 16.52 dollars.

Source: Nasdaq

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