Advanced Micro Devices, Inc.
Ramsay weighed in on AMD following recent business divestitures and IP licensing deals. The analyst believes that the company’s Polaris ramp is “set to stabilize C&G revenue until its Zen launch.” The analyst notes that, historically, big gaming companies have refreshed and revised their gaming consoles about every 6 years and the emergence of 4K/VR will speed up this process. This will serve as a benefit for AMD, according to the analyst. With faster console revision taking place in the gaming industry, AMD’s semi-custom volumes will likely see growth.
The analyst affirms, “With the emergence of the gaming console business, we believe AMD lost focus on gaming GPU developers and tools – a focus now renewed. With an aggressively priced Polaris GPU roadmap, we forecast gradual share recovery from low-20%s to 30% versus NVIDIA.” In addition, the analyst sees further IP licensing opportunities for GPU and CPU cores. The potential for a higher margin semi-custom enterprise project in conjunction with hyperscale cloud vendors and a recovery of server share keeps the analyst maintaining a strong outlook for AMD.
The analyst reiterates a Buy rating for AMD with a price target of $6.00.
TipRanks analytics shows 38% of analysts rating AMD as a Buy, 24% issuing a Hold rating, and 38% maintaining a Sell rating for the stock. The consensus price target for AMD is $4.12, marking a 25.23% downside from current levels.
Ramsay also weighed in on NVIDIA in light of the recent strong growth in enterprise and automotive revenue and the launch of Pascal.
According to the analyst, substantial installed base upgrade potential still exists within the gaming market and there is sizable growth to be had in VR. According to Ramsay, “With 80% of the GeForce installed base still not upgraded to VR-capable GPUs and GeForce penetration in emerging markets [and] only 1/10th of developed markets, we believe the NVIDIA gaming franchise is well positioned for sustained strong low-teens growth catalyzed by the launch of Pascal, despite a much improved product portfolio from GPU competitor AMD that is likely to regain discrete GPU share back toward 30% over the next couple years.”
The analyst adds further that Deep learning could yield approximately $1 billion of accelerator business, even despite share divergence as a maturing market emerges.
The analyst reiterates his Buy rating for NVDA with a price target of $60.00.
According to TipRanks, Matt Ramsay is ranked #609 of 4,064 analysts and maintains a success rate of 56% with an average return of 4.7%. When rating AMD, Ramsay upholds a success rate of 100% and an average profit of 43.4%. When rating NVDA the analyst retains a success rate of 100% with a 43.4% average profit.
TipRanks shows that 64% of analysts issue a Buy rating for NVDA, while 27% maintain a Hold rating for the stock, and 9% uphold a Sell rating for the stock. The consensus target price for NVDA is $46.31, marking a 12.55% downside from current share prices.