Advanced Micro Devices, Inc. (AMD) Back in Competition Mode, Apple Inc. (AAPL) iPhone X May Surprise the Street


Advanced Micro Devices, Inc. (NASDAQ:AMD) and Apple Inc. (NASDAQ:AAPL) have stoked the fire on Wall Street, with AMD investors sending shares racing yesterday and Apple’s iPhone X charging the masses with tech frenzy ahead of the launch. Two analysts have become increasingly positive on AMD, between the U.S. International Trade Commission gunning for the chip giant’s foreign competition and a new product line that could make Intel Corporation (NASDAQ:INTC) shareholders nervous. Meanwhile, another analyst eyeballs the Street’s projections and adamantly deems them insufficient considering the lightning potential of the forthcoming iPhone X. Let’s take a closer look:

AMD Firing Up to Take On Intel

AMD shares climbed almost 7% yesterday on the heels of the U.S. International Trade Commission bringing out its teeth for foreign competition, opening an investigation for patent violations. Likewise, investors paid attention to a bullish forecast from Jefferies analyst Mark Lipacis, who believes the chip giant’s new products are ready to tackle on rival Intel with an x86 chip-level fury.

As such, cheering AMD bringing in the heat as its “competition returns to the performance market,” the analyst reiterates a Buy rating on shares of AMD while lifting the price target from $13 to $16, which represents a just under 10% increase from where the stock is currently trading.

“In total, we estimate Zen could represent incremental sales between $1.1 billion and $4.6 billion,” predicts Lipacis.

As the analyst sizes up his checks, there has been “a positive reception for Zen in the enthusiast DT channel and the Asian Cloud Server market.”

Mark Lipacis has a very good TipRanks score with a 79% success rate and a high ranking of #4 out of 4,564 analysts. Lipacis yields 30.4% in his annual returns. When recommending AMD, Lipacis garners 66.6% in average profits on the stock.

Additionally, though Susquehanna analyst Christopher Rolland remains sidelined, he is more confident amid AMD’s new line of products, reiterating a Neutral rating on AMD while boosting the price target from $9 to $12, which represents an approximately 17% downside from current levels. From Rolland’s stance, AMD is set-up for a strong second quarter thanks to product availability.

The analyst believes, “the Street’s +5% QOQ estimate for 2Q17” setting expectations for the giant “is very beatable on a bona fide Ryzen roll-out.”

Moreover, “We estimate that AMD has just ~5% model share in laptops on the market in 1Q17, slightly worse than prior quarters (between 6% and 8% share). The company ceded some share to Intel at Lenovo and Dell, while it remained relatively flat at HP and ASUS, and gained on Intel at Acer. We expect that Ryzen will come to laptops in the second half of 2017 and should help the company regain share,” Rolland surmises.

TipRanks analytics demonstrate AMD as a Buy. Out of 19 analysts polled by TipRanks in the last 3 months, 9 are bullish on AMD stock, 9 remain sidelined, and 1 is bearish on the stock. With a loss potential of nearly 20%, the stock’s consensus target price stands at $11.56.



Apple’s Got Some Juice Left

Apple is seeing an invigorated wave of positive forecasts across the Street, and Cowen analyst Timothy Arcuri joins in the bullish conversation, believing the rest of his colleagues are still considerably undervaluing the power the tech giant is ready to wield with its iPhone X.

Therefore, the analyst reiterates an Overweight rating on AAPL while boosting the price target from $135 to $155, which represents a close to 10% increase from where the shares last closed.

Arcuri opines, “Street ests remain WAY TOO LOW for C2H:17 and C2018 as an aging base (esp in China) forms a powder keg for this launch.”

Furthermore, “While we are not arguing for a ton of multiple expansion from here, we believe estimates are still way too low AND there is still probably a little juice left in the multiple,” continues the analyst.

“Our field work continues to support a feature-rich three-model launch that still looks consistent with prior launches in terms of timing. While it is still a little early, overall units for the three new models COMBINED look to be ~110MM units for C2017 […] we estimate ~55-60MM will be the 5.8″ OLED version, ~20-25MM will be the 5.5″ version (same form factor as the current iPhone 7+) which will likely have TFT-LCD screen, and ~35-40MM will be 4.7″ (same form factor as the current iPhone 7) which will have TFT-LCD screen. This is the build, but of course actual shipments for the sum of FQ4:17 (Sept) and FQ1:18 (Dec) would be below this number, but adding in a typical ‘tail’ for 7/7+, Street numbers still look WAY TOO LOW – a contention we have maintained for several Qs now,” Arcuri concludes.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, five-star analyst Timothy Arcuri is ranked #103 out of 4,564 analysts. Arcuri has a 67% success rate and earns 18.6% in his yearly returns. When recommending AAPL, Arcuri collects 27.8% in average profits on the stock.

TipRanks analytics exhibit AAPL as a Buy. Based on 36 analysts polled by TipRanks in the last 3 months, 28 rate a Buy on Apple stock, 6 maintain a Hold, while 2 issue a Sell. The 12-month average price target stands at $149.50, marking a nearly 6% upside from where the stock is currently trading.

 

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