SAN FRANCISCO Jan 9 Shares of Advanced Micro
Devices Inc AMD.N tumbled 10 percent on Wednesday after
brokerage Goldman Sachs said Intel remained its top pick among
semiconductor stocks for 2008 and could keep racking up market
share gains against its smaller rival.
The brokerage, which maintained its $30 price target on
Intel shares, said it expects the company to deliver solid 2007
It also said Intel's 2008 first-quarter and full-year
margin forecasts would likely top Wall Street estimates.
Goldman kept its "buy" rating on Intel Corp (INTC.O), even
as it removed the Silicon Valley company from a collection of
stocks the brokerage calls its "technology framework." Goldman
noted that Intel shares have fallen more than the Standard &
Poor's 500 index .SPX since last July.
"While we are cognizant of the macroeconomic concerns in
the U.S. and Europe potentially negatively impacting Intel's
fundamentals, we expect strong growth in the emerging markets
(particularly in notebooks) to provide a cushion against a
slowdown in spending in the U.S. and Europe," the brokerage
AMD, which gained considerable ground against Intel in 2005
and 2006 before stumbling badly last year, has struggled with
product delays and an inability to ramp up manufacturing of a
key chip, code-named Barcelona, that it had said is key to
reversing its fortunes.
"Intel is very well positioned to continue to gain (market)
share, particularly in servers, given AMD's disappointing
execution," Goldman analyst James Covello wrote in a report.
Intel sold off in the first few trading days of 2008, along
with other chip and technology stocks, amid growing concerns
that the United States is headed for a recession. Goldman said
on Wednesday it expects a recession this year.
"We believe that the recent sell-off in Intel's stock on
near-term demand concerns is overdone," Covello wrote, adding
that he recommends "aggressive" purchase of Intel stock at
current price levels.
Intel was one of the few stocks in the Philadelphia
Semiconductor Index .SOXX that rose on Wednesday. Its shares
were up 11 cents at $22.37 in midafternoon trade, after earlier
rising as high as $22.87.
AMD was off 60 cents at $5.40. The Philadelphia
Semiconductor Index was down 1.7 percent.
(Reporting by Duncan Martell; Additional reporting by Tenzin
Pema in Bangalore; editing by John Wallace)