Advanced Micro Devices (AMD) shares rose nearly 4% yesterday after the chip giant’s Next Horizon event kicked off with the announcement that the first AMD EPYC processor-based instances are now available on Amazon Elastic Compute Cloud on AWS. This partnership will give some customers lower prices for their Amazon cloud services. Overall, the event hlighted the company’s 7nm-based EPYC CPU and Radeon Instinct GPU (for data centers), road maps and specs.
“Tone of the conference was bullish as CEO Dr. Lisa Su outlined AMD’s datacenter opportunity,” says Oppenheimer’s Rick Schafer. “Product launches mark significant milestones for the company, but we remain sidelined as investor share gain expectations for AMD remain elevated and valuation support elusive.”
As such, Schafer reiterates a Perform rating on AMD stock without suggesting a price target. (To watch Schafer’s track record, click here).
Rosenblatt’s analyst Hans Mosesmann stated, “Perhaps the most surprising announcement yesterday was EPYC CPU (aka Rome), will top out at 64 cores vs. the expected 48 cores and the 32 cores of the current EPYC. AMD show cased Rome silicon that supports 2x the performance of EPYC, and handily beating dual socket high-end Intel Xeon Skylake configuration. Not to mention significant 7nm advantages in power usage and cost. We struggle to see how Intel can counter Rome even when its 10nm process node is available in 2020.”
Mosesmann seems to be more bullish than Schafer, reiterating a Buy rating on AMD with a $40 price target, which implies a over 80% upside from current levels. (To watch Mosesmann’s track record, click here).
Cautious optimism circles the semiconductor giant, as TipRanks analytics exhibit AMD as a Buy. Out of 26 analysts polled in the last 3 months, 12 are bullish on Advanced Micro Devices stock, 12 remain sidelined, and 2 are bearish on the stock. With a return potential of nearly 24%, the stock’s consensus target price stands at $25.65.