Advanced Micro Devices, Inc. Newest Competitive Swipe Could Gain High-End Graphics Market Share, Micron Technology, Inc. Looking at a Potential FQ4 Earnings Beat

Advanced Micro Devices, Inc. Gearing to Rule the Global Graphics Card-Verse

At Advanced Micro Devices, Inc.’s (NASDAQ:AMD) Capsaicin event, the chip giant introduced to eager games a slate of fresh high-end processors and graphics chips for the taking, an exciting launch in anticipation of the Siggraph graphics show in Los Angeles.

The chip giant is hoping to breathe new life into the high-end PC market from new Ryzen Threadripper central processing units (CPUs) to Vega graphics processing units (GPUs). The question becomes whether AMD can stand up against its steep competition, with Nvidia ruling the top end gaming cards and Intel reigning as king of the desktop processors.

From the stance of Wells Fargo analyst David Wong, the answer is yes, with the analyst believing this chip giant is serving up its A game in the chip-maker-against-chip-maker arena.

It is no surprise considering the AMD’s goal has been set to become “the most advanced consumer graphics card in the world,” and Wong does not think this is a pipedream by any means.

Wong asserts, “We believe the launch of Vega-based graphics cards may compete against Nvidia’s top end gaming cards including the GTX 1080, and help AMD gain market share in the high-end graphics market […]”

Following the unleashed high-end Ryzen Threadripper CPUs coupled with Vega GPUs, the analyst casts a bullish forecast ahead for the giant, reiterating an Outperform rating on shares of AMD without listing a price target. (To watch Wong’s track record, click here.)

Overall, these releases are solid offensive moves for the chip giant, as Wong underscores, “We think these Ryzen Threadripper processors will help AMD gain shares in the high-end desktop market which Intel currently dominates. AMD’s Ryzen Threadripper processors are expected to compete against Intel’s latest Skylake Core-X processors […] Threadripper and Ryzen do not have integrated graphics circuitry, and so, we believe, must be used together with discrete graphics chips. Intel’s Core-X products are similarly CPUs with no integrated graphics. However, Intel also has a full lineup of Kaby Lake (and Skylake) processors with integrated graphics, whereas AMD has yet to introduce desktop or notebook products with its newest Zen cores and integrated graphics. AMD has indicated that it plans to launch its Ryzen notebook processors with integrated graphics in 2H17.”

TipRanks analytics showcase AMD as a Buy. Out of 24 analysts polled by TipRanks in the last 3 months, 9 are bullish on Advanced Micro Devices stock, 12 remain sidelined, and 3 are bearish on the stock. The stock’s consensus target price stands at $13.79, which roughly aligns with current levels.

Micron Technology, Inc. Near-Term Concerns Are Overbaked into Stock

When releasing third fiscal quarter results one month prior, Micron Technology, Inc. (NASDAQ:MU) management had called for a roughly 5% quarterly top-line climb in growth. Yet, considering that DRAM contract price through the past two months has seen a 5 to 6% quarter-over-quarter rise, there is room for a beat come time for the posting of the print. From the eyes of top analyst Vijay Rakesh at Mizuho, though bears are circling the chip giant’s stock that has seen stronger price action days, he believes now remains a good time to buy Micron shares- particularly with new August tracking now signaling to an upside for the giant’s fourth fiscal quarter performance.

Seeing any share weakness as a compelling prospect to invest, the analyst maintains a Buy rating on MU with a price target of $38, which represents a 34% increase from where the shares last closed.

Rakesh highlights, “NAND pricing has been on a significant uptrend, up 2-5% in June/July. We believe MU should be able to drive upside to current ~5% q/q top-line consensus even on flat bit growth (though 1x nm and 64-bit NAND point to higher bit combined with AugQ seasonality of up 10-11% q/q bit growth) and the pricing trends point to upside.” Additionally, consensus expectations for the fourth fiscal quarter do not look unbeatable, calling for flat quarterly growth which is quite beneath Micron’s usual performance around this time of year. Keep in mind Micron is usually  a company that over the past five years has historically seen a top-line boost of 12% quarter-over-quarter on average. Especially with the iPhone release rumored to see a push-back from September, the analyst would not be shocked for Micron to score with upside, outperforming consensus flat expectations.

Moreover, investors should take advantage of any pullback, as Rakesh believes, “The stock has been pulling back on concerns of memory industry capex in 2018-19, which could be overdone near-term. We believe 2018 has a limited DRAM capacity increase with no new Fabs available. While there is 3D-NAND capacity being added, NAND supply remain tight given growing pains in the transition to 48-Layer/64-Layer.”

“MU stock price action has been underwhelming and bears watching, as the stock has been soft near-term despite strong fundamentals. We remain buyers of MU, though we are watching the weaker price action versus strong fundamentals, concerns on 2018 DRAM-NAND supply, and some of the softness in broader technology,” contends the analyst, staunchly bullish in Micron’s corner.

Vijay Rakesh has a very good TipRanks score with a 71% success rate and a high ranking of #46 out of 4,638 analysts. Rakesh yields 27.8% in his annual returns. When recommending MU, Rakesh garners 43.8% in average profits on the stock.

TipRanks analytics demonstrate MU as a Strong Buy. Based on 21 analysts polled by TipRanks in the last 3 months, 17 rate a Buy on Micron stock, 3 maintain a Hold, while 1 issues a Sell. The 12-month average price target stands at $40.31, marking a 42% upside from where the stock is currently trading.

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