Advanced Micro Devices, Inc. (NASDAQ:AMD) Does Not Need a Spin-Off of Units to Sustain Rally


Dallas, Texas 06/26/2015 (Financialstrend) – There have been reports in the media which suggests that Advanced Micro Devices, Inc. (NASDAQ:AMD) is considering spinning off some of its assets as it looks for ways to unlock shareholder value. However that may not be the best move according to some analysts. The company has already refuted suggestions that it has hired advisers to explore assets split as analysts maintain it should focus on integrating and improving products already in the market.

Analysts Sentiments

Capital Markets analyst, Gus Richard, believes Advanced Micro Devices, Inc. (NASDAQ:AMD) could face regulatory challenges if it ever considers selling any of its assets. Macquarie Research Deepon Nag shares the same sentiment saying the company could find it hard to bypass regulatory hurdles on such a move.

Having unveiled new chips recently, Advanced Micro Devices, Inc. (NASDAQ:AMD) has said that it intends to continue expanding to new markets as it looks to shrug off competition in the business. Richard believes the company should be better off keeping its graphics and processor business together. Such a move according to the analyst should allow the loss-making chipmaker to make the most on overlaps in R&D.

Advanced Micro Devices, Inc. (NASDAQ:AMD) could be worth more than its current market valuation should it resort to improving its product offerings according to Richard. Should it fail on this front, its assets are sure to attract acquirers from China.

Sales Concerns

There are concerns that Advanced Micro Devices, Inc. (NASDAQ:AMD) sales could plunge by 21% this year as the company continues to face stiff competition from Intel Corporation (NASDAQ:INTC) on personal computer processors. A decline in PC demand is not helping the situation, and the company is facing big struggles on its push to regain market share in the server chips business

It is still unclear whether the company will be able to sustain its recent impressive run in the market as talk about a potential split continue to fizzle.