AMD dips even as Morgan Stanley names it top chip pick into 2023; chip sector falls
sankai

Advanced Micro Devices (NASDAQ:AMD) closed down more than 3% on Thursday, among the weakest semiconductor stocks, as the broader semiconductor sector fell sharply following a hawkish outlook from the Federal Reserve and weak consumer spending.
On Thursday, Morgan Stanley analyst Joseph Moore said that AMD (AMD) had replaced Lam Research (NASDAQ:LRCX) as the firm's top semiconductor stock for 2023, pointing out that the Dr. Lisa Su-led AMD has not really participated in the rally in semiconductor stocks over the past couple of months. 
Moore, who rates both AMD (AMD) and Lam Research (LRCX) overweight, noted that the outlook for the industry going into next year is still "challenging," making the firm cautious even as stocks have rallied in recent weeks, including a 50% rise for Lam.
"Lam remains [overweight] and is our preferred stock in semicaps, and we definitely think that some relative rerating was in order, but the magnitude of the rally saps our enthusiasm somewhat," Moore wrote in a research note. "AMD meanwhile has also rallied, but remains the worst performing stock in large cap despite the fact that their server roadmap demonstrably improved its technology leadership position over the course of the year." 
Lam Research (LRCX) fell more than 4%, while competitors KLA Corp. (KLAC) and Applied Materials (AMAT) fell 5.3% and 4.6%, respectively. 
ON Semiconductor (NASDAQ:ON) shares fell nearly 5%, with some investors attributing the move to a potential agreement with Wolfspeed (WOLF) for additional wafer capacity.
In a research note, Piper Sandler analyst Harsh Kumar said he was "quite confident" that ON Semiconductor (ON) was not the company that signed the deal with Wolfspeed (WOLF), adding that the company is likely to be wafer independent by the start of 2024, making such a deal unnecessary.
Other semiconductor stocks also fell sharply on Thursday, including AMD competitors Intel (INTC) and Nvidia (NASDAQ:NVDA), which declined approximately 4% each. 
Semiconductor stocks tied to smartphones, such as Qualcomm (QCOM), Skyworks Solutions (SWKS) and Qorvo (QRVO) fell 4.2%, 3.4% and 4.1%, respectively as the U.S. government said that retail spending in November decline 0.6% from October.
Also seeing sharp moves to the downside were Texas Instruments (TXN), Analog Devices (ADI), Micron Technology (MU) and Broadcom (AVGO) and Marvell Technology (MRVL), all of which fell 2% or more.
Last month, Advanced Micro Devices (AMD) said it had resolved all of its ongoing patent litigations with Analog Devices (ADI) on mutually agreed terms.