Weakness among semiconductor stocks is weighing on the Nasdaq today, with the Philadelphia Semiconductor Index falling by 1.6. Among the equities in focus are semiconductor giants Advanced Micro Devices, Inc.(NASDAQ:AMD) and Micron Technology, Inc. (NASDAQ:MU). Analysts from Wells Fargo and Sterne Agee chime in.
Advanced Micro Devices, Inc.
Wells Fargo analyst David Wong was out pounding the table on AMD Thursday, reiterating an Outperform rating with a valuation range of $4.00 to $4.50.
Wong wrote, “We think that AMD’s recent earnings report indicated that AMD is making substantial progress in reducing its financial risk by: 1) Entering into financial agreements which bring cash into the company, 2) Stabilizing its microprocessor market share position, and 3) Stabilizing its graphics market share position. We have discussed AMD’s joint venture agreements and microprocessor share in other notes, in this note we look at AMD’s progress in graphics chips. We think that AMD is probably gaining GPU (graphics processor unit) market share, at least in the discrete desktop segment.”
“We believe that market share gains in graphics chips have been a contributor to Nvidia’s top line performance and stock price value over the last two years. If AMD manages to build momentum in gaining graphics share in 2016, we think that this could be a risk to Nvidia’s stock,” the analyst continued.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst David Wong has a yearly average return of 10% and a 64% success rate. Wong has a 0.5% average return when recommending AMD, and is ranked #256 out of 3913 analysts.
Micron Technology, Inc.
Sterne Agee analyst Doug Freedman reiterated a Buy rating on shares of Micron, with a price target of $18, following recent news that company had begun mass production of GDDR5X memory. The first graphics card to use the new type of graphics DRAM will be NVIDIA’s upcoming GeForce GTX 1080 graphics card.
Freedman noted, “One of our keys to 2016 memory investment is the tracking of new product development roadmaps – including High Bandwidth Memory (HBM) that uses thru-silicon via (TSV). Recent data points appear to suggest a greater than expected challenge to ramping HBM-based products. NVIDIA’s GTX1080/70 product uses GDDR5X from Micron, while a positive for Micron in the near term, it appears to us that the original plan was calling for HBM2 in this segment of the GPU market. We see a common thread forming as Intel’s Knights Landing also relies on TSV based memory which is also slow to reach commercial volumes. Commercialization of HBM is required to remove the present memory bandwidth bottleneck to enable performance gains from next-gen processors.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Doug Freedman has a yearly average return of 15.9% and a 62.8% success rate. Freedman has a -10.7% average return when recommending MU, and is ranked #48 out of 3913 analysts.