The CES conference in Las Vegas wraps up tomorrow and by the way the room reacted to Advanced Micro Devices’ (AMD) Chief Executive Lisa Su when she addressed the clapping crowd, you would have thought she was a rock star. That’s how Rosenblatt Securities’ analyst Hans Mosesmann describes it. Leather jacket and all, the MIT-educated, 49-year-old business extraordinaire introduced the new gaming card called the Radeon 7 and spoke about the company’s efforts to extend itself in the servers, high-performance laptops and PCs and cloud services departments. The card is unique in that it has higher frame rates than new Nvidia cards, but AMD is selling them for a lower cost – at $699.
“Very good keynote and Dr. Su’s keynote should open industry and investor eyes to the sustainable strong roadmap going forward,” Mosesmann said. “Dr. Su announced the new “gaming” Radeon VII at 7nm which sets the stage for a more interesting battle with Nvidia’s (NVDA) Turing (Nvidia won’t be at 7nm in 2019). Radeon VII sports 25% performance improvement at the same power envelope. The specs look quite good. Our high-level take-away is that AMD is set to gain incremental share at the high-end gaming space (where they really don’t play today).”
Mosesmann considers the stock to be fairly safe especially after Microsoft’s head of gaming, Phil Spencer also took the stage at CES to tout his company’s strong relationship with AMD, especially when it comes to the Xbox platforms. He referred to the partnership as “critically important” for future endeavors, which Su has said in the past will include gaming consoles.
All in all, the analyst reiterates a Buy rating for AMD stock, with a price target of $40, which shows a 98% upside from current leveles. (To watch Mosesmann’s track record, click here)
Not every analyst on Wall Street feels as positively as Mosesmann. TipRanks data shows out of 25 analysts, 12 are bullish, 11 sidelined and 2 are bearish. With a consensus price target of $25.68, the potential upside is 27%. (See AMD’s price targets and analyst ratings on TipRanks)