Advanced Micro Devices (AMD) is a mover and shaker out on the Street today, with investors sparking the stock on an almost 9% upturn. Why the excitement? Susquehanna analyst Christopher Rolland released his third-quarter edition of PC-SIGnals, primary research tying big-data collection methods with fundamental analysis tracking semiconductor trends within the PC supply chain. The silver lining: The research highlights AMD gaining share in both desktops and laptops as Ryzen ramp continues.
Rolland stated, “AMD is the winner of 3Q18 PC-SIGnals Most data points for AMD were constructive, including better desktop share (+1.5% QOQ), better laptop share (+1.7% QOQ), and higher aftermarket GPU share (+4% QOQ). Lower (retail) graphics card pricing is a downside, but somewhat expected as crypto demand is now virtually zero.” Furhtermore, “While AMD continues to ramp in Desktop CPU (16.7% model share, up +1.5% from 15.2% in 2Q18), the company (finally) appears to be ramping in laptops with Ryzen Mobile. In 3Q18, we estimate that AMD held 4.9% model share for laptops in 3Q18, up +1.7% from 2Q18 (3.2% share). HP and Acer are driving the 3Q18 Ryzen uptick.”
Rolland can take this opportunity to eat his hat somewhat on his cautious stance on AMD. The analyst had expected headwinds to continue throughout the second half of the year, and some pullback in the stock —clearly neither of these two things happened.
That said, the analyst still sees limited upside from here and, as such, reiterates a Neutral rating on AMD, with a price target of $14, which implies a downside of 53% from current levels. (To watch Rolland’s track record, click here)
Net net, Wall Street is torn when it comes to whether to sing this chip giant’s praises or assess with an apprehensive gaze, as according to TipRanks, out of 20 analysts polled in the last 3 months, 9 are are bullish on AMD stock while 9 remain sidelined, and 2 are bearish. With a loss potential of 28%, the stock’s consensus target price stands at $21.44. (See AMD price targets and analyst ratings on TipRanks)