Oppenheimer raises red flags on AMD, Cirrus, semiconductor sector

|By:, SA News Editor

Oppenheimer calls Advanced Micro Devices (AMD -2.3%) and Cirrus (CRUS -1.6%) its "top structural/secular shorts" in downgrading both to Underperform, part of a broader negative semiconductor outlook.

AMD's PC/graphics sales likely will continue falling faster than PC units as Intel leverages its vast manufacturing/cost advantage to aggressively and profitably capture low-end share, the firm says; that, combined with low margins from its chips for Sony‘s PlayStation 4 and Microsoft‘s Xbox One, promise to bring down overall corporate gross profit.

On CRUS, Oppenheimer sees lower average selling prices and gross margins; Broadcom ([[BRCM] +2.4%) is cut to Perform from Outperform, as the firm does not believe the LTE business is going to materialize after the recent analyst day.