Slowing smartphone demand and concerns over economic weakness in China has hurt semiconductor stocks in recent weeks. Among the equities in focus today are processor giant Advanced Micro Devices, Inc. (NASDAQ:AMD) and graphics card giant NVIDIA Corporation (NASDAQ:NVDA). Let’s take a look and see what Canaccord analyst Matt Ramsay has to say about AMD and NVDA.
Advanced Micro Devices, Inc.
Matt Ramsay reiterated a Hold rating on shares of Advanced Micro Devices, and raised the price target to $2.40 (from $2.00), after hosting an investor meeting with Senior Vice President and Chief Architect Raja Koduri and Liz Morali from investor relations at CES.
Ramsay noted, “While NVIDIA’s strong market position in discrete and gaming GPUs remains, we left very impressed with the graphics division’s new roadmap and focus. Overall, we believe AMD’s diversification strategy continues to show gradual progress and a refreshed roadmap could position the company for more defensible longterm sales beginning in earnest in 2H/16 as the roadmap moves onto FinFET nodes. While Q3/15 results marked the first simultaneous Q/Q growth in both businesses in several years, revenue still declined ~25% Y/Y and another restructuring is just underway to properly size the cost structure. Finally, while AMD’s engineering teams continue to introduce well-architected APU and GPU products, competitors Intel and NVIDIA maintain foundry and scale advantages.”
“Despite believing in the leadership under AMD’s new CEO Lisa Su, we wait for tangible signs of multi-quarter business stability before becoming more constructive. We maintain our HOLD rating, but raise our price target from $2 to $2.40 as our 2H/16 GPU estimates increase slightly,” the analyst concluded.
According to data compiled by TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Matt Ramsay has a yearly average return of -10.4% and a 31.5% success rate. Ramsay has a -33.1% average return when recommending AMD, and is ranked #3468 out of 3594 analysts.
The overwhelmingly majority of experts still say AMD is a “hold.” The average forecast is for the stock to hit $2.51 in the coming months.
In addition, analyst Matt Ramsay reiterated a Buy rating on shares of Nvidia, with a $35 price target, after hosting an investor meeting with CFO Colette Kress at CES.
Ramsay wrote, “Overall, we believe NVIDIA’s transformation from a PC-leveraged GPU supplier to a growing, diverse visualcomputing company is complete. In fact, we believe emerging GPU applications including automotive, mobile, cloud and HPC – along with strong gaming GPU sales likely infused by upcoming VR headset and game launches – will continue to drive solid topline growth and strong margins and now represent >85% of revenue. With our F’18 estimates now reflecting the removal of the Intel IPR stream, we believe NVIDIA has a leading technology platform and deep technology moats to generate strong sales and earnings growth given increasing secular importance of real-time and machine learnings graphics computing.”
According to TipRanks.com, Ramsay has a -1.9% yearly average return when recommending NVDA. Out of the 13 analysts polled by TipRanks in the last 3 months, 5 rate Nvidia stock a Buy, while 8 rate the stock a Hold.With a potential upside of nearly 5%, the stock’s consensus target price stands at $31.67.