- Truist analyst William Stein warned against the sustained semiconductor rally due to a sudden negative shift in demand signals from a wide swath of computer, consumer, and communications OEMs to at least some of their semi-suppliers.
- The cuts mainly related to production in the second quarter, but demand throughout the year's second half remained strong.
- While a single-quarter adjustment or a temporary headwind was possible, he was concerned that "a combination of just enough demand destruction and just enough additional supply is leading to a traditional cyclical downturn."
- Consequently, Stein adjusted his price targets for several key semiconductor stocks, including Advanced Micro Devices Inc (NASDAQ:AMD), Intel Corp (NASDAQ:INTC), and NVIDIA Corp (NASDAQ:NVDA).
- His new price target for AMD is $111, down from $144 (7% upside), while he cut Intel's target to $49 from $53 (3% upside). He retained a Hold rating on both the stocks.
- Nvidia remained a Buy for Stein, even though he lowered his price target to $298 from $347 (23.1% upside). While he is constructive on the stock and continues to rate it a Buy, he said near-term price effects could become more volatile.
- Stein preferred NXP Semiconductors NV (NASDAQ:NXPI), Analog Devices Inc (NASDAQ:ADI), and ON Semiconductor Corp (NASDAQ:ON), as they were more reliant on industrial and auto demand.
- Price Action: AMD shares traded lower by 1.74% at $101.92 on the last check Friday.
