Crypto-Mining’s Impact on AMD Share Prices Concerns Analysts
Although cryptocurrency mining has seen a boom in recent months and Advanced Micro Devices Inc.’s (AMD) shares are grown substantially as well, investors seem to be concerned. Investors are warning that if mining becomes less popular, then AMD’s share price may decrease as well.
The decrease may certainly be a disappointment, especially in light of AMD’s gains in the past month. The stock has increased 30 percent due to the company’s graphic processing units (GPUs), which have become effective hardware tools for crypto mining. Without the popularity of crypto mining, then the hardware may be less necessary, and accordingly, the stock price could decrease as well.
According to Stacy Rasgon, a Bernstein analyst, miners have benefited from AMD’s GPU boom, even though the devices were originally developed for the purpose of gaming. If miners begin using products by AMD’s rivals, then the “could suffer not only unit shortfalls in a crypto decline but also average selling price pressures if mix trends down, potentially exacerbating any effects.”
Further, according to Joseph Moore, who is part of Morgan Stanly, AMD faces “imminent Nvidia product launch that they may not have an answer for in another year.” And that “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 expenses, which further raises the bar for the processor business if crypto momentum should fade.”