AMD cut by Craig Hallum on slowing growth worries despite strong Q4, forecast
Semiconductor company AMD (NASDAQ:AMD) was downgraded by investment firm Craig Hallum on Wednesday, even as the Dr. Lisa Su-led company reported quarterly results and guidance that topped estimates.
Analyst Christian Schwab lowered his rating on AMD (AMD) to hold from buy and maintained the per-share price target of $76, noting that the company has executed very well for a number of years, but it could wind up being a "victim of its own success."
"We believe the company is positioned to continue executing well, and grow, but likely at a more marginalized pace," Schwab wrote in a note to clients, adding that the company's product portfolio has helped it drive market share gains away from competitors such as Intel (INTC), along with continued revenue growth.
AMD (AMD) shares gained nearly 3% in premarket trading following its quarterly results and forecast. Nvidia (NVDA), which competes with AMD (AMD) in gaming and the data center, was slightly slightly in premarket trading, while Intel (INTC) saw fractional gains. 
Schwab added that revenue growth may be hard to come by in 2023 due to continued weakness in the PC industry and concerns about the data center space.
On the company's conference call, AMD's (AMD) Su said the company is a good position to continue making gains in the data center.
"Our largest growth driver is the data center," Su said. "We're positive on what we can do [in the data center] and will watch the macro [economic environment] on client and gaming."
For the period ending December 31, AMD (AMD) earned 69 cents per share on $5.6B in revenue, up 16% year-over-year, as strength in the Embedded and Data Center segments outweighed weakness in the Client and Gaming segments.
The company also generated gross margin of 43% in the period, down 7%, as amortization of certain Xilinx assets impacted the quarterly results.
A consensus of analysts were expecting AMD (AMD) to earn 67 cents per share on $5.5B in revenue.
Looking ahead, AMD (AMD) said it expects first-quarter revenue to be between $5B and $5.6B, a decline of 10% year-over-year. Weakness in the PC and Gaming segments are expected to continue, while the Embedded and Data Center segments continue to grow. Analysts expect AMD (AMD) to generate roughly $5.56B in revenue during the period.
Last month, Bernstein analyst Stacy Rasgon downgraded AMD (AMD) to market perform from buy, citing the continued deterioration of the PC market.
Analysts are largely bullish on AMD (AMD). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates AMD a HOLD.