Stocks may have ended the day in the black, but the bulk of the intraday gains were given back by the time the closing bell rang. Worries surrounding the upcoming meeting between President Trump and China’s President Xi Jinping were cited as the cause, though the market was not well-positioned for a big gain regardless of Thursday’s backdrop. The S&P 500 ended the day at 2,357.49, up 0.19%.
Advanced Micro Devices, Inc. (AMD)
As was pointed out late last year, computer chip company Advanced Micro Devices has a lot going for it now … perhaps more than it has in years. But, AMD shares were overbought and overvalued, rallying at an unsustainable pace.
Goldman Sachs agrees with that stance, initiating coverage of AMD at a “Sell,” saying the stock’s worth only $11 per share versus its current price of $13.18. Analyst Toshiya Hari believes the stock is ‘priced for perfection,’ while still acknowledging the company has taken tremendous steps forward. Hari also expects rivals Nvidia Corporation (NASDAQ:NVDA) and Intel Corporation (NASDAQ:INTC) to begin lowering prices on their CPUs, GPUs and related chips before AMD garners any more market share by leveraging its entry-level pricing.
AMD ended the day down 6.3%.
Plug Power Inc (PLUG)
Plug Power shares may have been off to the tune of 4.9% on Thursday, but don’t read too much into the move. That pullback was only a fraction of yesterday’s 73% gain from PLUG shares in response to news that Amazon.com, Inc. (NASDAQ:AMZN) had inked a huge deal with the fuel cell company.
Long story made short, Amazon has secured the rights to acquire up to a 23% stake in Plug Power, contingent on purchasing at least $600 million worth of fuel cell batteries. Amazon’s interest and potential spend on the company’s wares is compelling enough, in that Plug Power only generated $86 million worth of revenue all of last year.
The fact that Amazon is similarly interested in an equity stake in Plug Power speaks volumes about the potential upside Amazon sees in fuel cells. Today’s relatively minor pullback from PLUG shares was just some predictable profit-taking.
SeaWorld Entertainment Inc (SEAS)
Last but not least, AMD wasn’t the only stock Goldman Sachs took a swing at on Thursday. The investment bank opened up coverage of SeaWorld Entertainment at a “Sell” as well, suggesting SEAS was only worth $16 per share, sending the stock 5% lower. Analyst Christopher Prykull is particularly concerned about sub-par growth stemming from waning attendance as well as the likely ineffectiveness of cost-cutting efforts.
SeaWorld’s parks were once a popular tourist destination, and still are to a large extent. But, the company continues to deal with the fallout of a documentary called Blackfish, which cast a shadow of doubt as to how well the park is capable of treating its captive animals.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.