Analysts are chiming in on two tech leaders, Advanced Micro Devices, Inc. (NASDAQ:AMD) and Apple Inc. (NASDAQ:AAPL), with insights as to these industry players’ prospects heading into the future. Whereas one analyst is fully on board the AMD train, another highlights various concerns AAPL faces heading into its next ten years, keeping him glued to the sidelines for now. Let’s dive in:
AMD Shares Ride Tide of Artificial Intelligence Headlines
Amid inflecting semi opportunities and as competition “is heating up” in the artificial intelligence spectrum, MKM analyst Ian Ing likes AMD’s enhanced opportunities in the playing field. As such, the analyst remains bullish, reiterating a Buy rating on AMD while boosting the price target from $8.00 to $10.50, which represents a 21% increase from current levels.
Regarding the price target lift for the semiconductor giant, Ing asserts, “We think the higher multiple (was 1.53x) reflects improved prospects for the company driven by the new product pipeline, including Zen server and Vega GPUs. It is also the historical EV/Sales multiple in the 2006 timeframe, when AMD fundamentals were last considered strong.”
“Recent announcements prove that AMD has some GPU exposure to data center acceleration: GOOG’s (GOOGL, Buy, $784.80, $935 PT, Sanderson) support for AMD GPUs in their machine learning platform, and BABA’s (BABA, Buy, $93.41, $130 PT, Sanderson) use for cloud virtualization. Although we expect AMD to be a relatively minor player, the shares of AMD are helped by continued A.I. headlines and NVDA, INTC, and QCOM turning increasingly vocal on the opportunity,” Ing surmises, seeing “Zen validation on track.”
As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, top five-star analyst Ian Ing has achieved a high ranking of #24 out 4,235 analysts. Ing upholds a 75% success rate and garners 31.6% in his yearly returns. When suggesting AMD, Ing yields 61.3% in average profits on the stock.
TipRanks analytics exhibit AMD as a Hold. Based on 16 analysts polled in the last 3 months, 5 rate a Buy on AMD, 9 maintain a Hold, while 2 issue a Sell. The 12-month average price target stands at $7.10, marking an 18% downside from where the shares last closed.
Apple Faces Obstacles in the Coming Decade
Oppenheimer analyst Andrew Uerkwitz is out with a research report on Apple highlighting his concerns as to a forthcoming peak to iPhone shipments as well as to a peak to the average selling price (ASP) for the iPhone, among other “broader strategic issues at Apple as we approach the next decade of the iPhone.” As such, the analyst reiterates a Perform rating on shares of AAPL without listing a price target.
June 29, 2017 will mark the prominent ten-year anniversary for the tech giant’s iconic iPhone, which the analyst anticipates could ship 1.2 billion units by this marker. Yet, regarding the next ten years, Uerkwitz notes, “We believe Apple lacks the courage to lead the next generation of innovation (AI, cloud-based services, messaging); instead will become more reliant than ever on the iPhone. Over the next decade we believe the stock will generally underperform the market. However, in years with radical redesigns (2014/2017?), the stock did/could outperform.”
From the analyst’s perspective, “We believe Apple’s primary role as ‘the hardware platform’ may at times clash with its secondary role as ‘the software and service provider.’ We see plenty of competitors that can seriously harm Apple’s ecosystem with software and services.”
Moreover, the analyst is not too confident on the tech titan in the next ten years that await. Ultimately, “We believe Apple is about to embark on a decade-long malaise. The risks to the company have never been greater. However, we believe its strong profitability, a cash hoard for protection, and one last ‘growth’ hurrah from the tenth anniversary phone will keep investors interested in the company,” Uerkwitz concludes.
According to TipRanks, which measures analysts’ and bloggers’ success rate, four-star analyst Andrew Uerkwitz is ranked #569 out of 4,235 analysts. Uerkwitz has a 50% success rate and gains 5.7% in his annual returns. However, when recommending AAPL, Uerkwitz loses 8.3% in average profits on the stock.
TipRanks analytics indicate AAPL as a Strong Buy. Out of 34 analysts polled by TipRanks in the last 3 months, 28 are bullish on Apple stock, 5 remain sidelined, and 1 is bearish on the stock. With a return potential of 16%, the stock’s consensus target price stands at $130.47.