Just this time last week, top analyst Matt Ramsay at Canaccord had taken a group of investors to meet the Advanced Micro Devices, Inc. (NASDAQ:AMD) management team at headquarters in silicon Valley, leaving “upbeat” on the chip giant’s roadmap and outlook bigger picture. Regarding short term product and financial apprehensions, after chatting about these “directly” with AMD leadership, the analyst stands by his belief in an advantageous risk/reward, betting on the company’s odds to be a real gains maker in the tech-verse.
Anticipating Ryzen Mobile and EPYC server sales will continue to rev up in the first half of next year, the analyst reiterates a Buy rating on AMD stock with a $20 price target, which represents a 76% increase from where the stock is currently trading.
“7 is the new 10” for Ramsay, who explains: “While not a specific focus in our meeting, the relative competitiveness between Intel’s 10nm and 7nm silicon from AMD’s foundry partners remains a focus item in our investor dialog. 2019 could mark a critical shift and we believe multiple 7nm parts have already taped out from AMD and material 2018 PC/GPU revenue and H1/18 EPYC-2 samples are realistic timelines as the roadmap moves to the new node.”
Additionally, even if EPYC server sales require some time (Ramsay angles for “several quarters to materially ramp,” this roadmap is ultimately “on track for success,” even if the Street may be setting “unrealistically high” expectations on server revenue.
“Overall, we reiterate our positive thesis on AMD as we anticipate stronger Ryzen sales and first Ryzen Mobile launches should alleviate risks in Q4/17. Additionally, 2018 should set up as an inflection point for the company as Ryzen Mobile and EPYC server sales ramp, and our industry checks indicate 7nm chip development timelines remain intact for what should prove even stronger CPU products across AMD’s roadmap versus Intel during 2H/18 and 2019,” Ramsay contends, confident on the tech stock’s opportunity at play.
By 2020, the analyst predicts AMD can outclass his long-term bullish target of $1.25+ in EPS.
Matt Ramsay has a very good TipRanks score with a 68% success rate and a high ranking of #64 out of 4,723 analysts. Ramsay realizes 24.4% in his yearly returns. When recommending AMD, Ramsay yields 32.3% in average profits on the stock.
Not everyone in the financial universe boasts the same confidence as this top performing analyst, considering TipRanks showcase AMD as a Hold. Out of 21 analysts polled by TipRanks in the last 3 months, 8 are bullish on Advanced Micro Devices stock, 9 remain sidelined, while 4 are bearish on the stock. With a return potential of nearly 30%, the stock’s consensus target price stands at $14.73.