Advanced Micro Devices, Inc. (AMD) Steamrolling to Share Gains, Micron Technology, Inc. (MU) Gets CFO Vote of Confidence


Watch Out, Intel- Advanced Micro Devices Battling Well in Processor Biz

Advanced Micro Devices, Inc. (NASDAQ:AMD) kickstarted a fresh onslaught in the processor arena when the chip giant decided to take on fellow rival Intel, and its processor chip business is looking good.

Merrill Lynch analyst Vivek Arya argues as such, noting that AMD is lunging forward in promising fashion with a road headed towards a nice payoff for investors.

Therefore, praising March’s Ryzen processor launch as unfolding with fierce competitive edge, the analyst reiterates a Buy rating on shares of AMD with a $18 price target, which represents a 36% increase from where the stock is currently trading. (To watch Arya’s track record, click here)

Arya highlights, “Our industry checks show improving mindshare/shelf-space for AMD’s new Ryzen desktop-PC processors, incl. 30-50% share at prominent e-tailors, well ahead of AMD’s 11% current desktop unit share,” adding the best takeaway of all: “The key conclusion is that AMD has momentum which should gradually translate to share gains.”

When juxtaposed against Intel’s line, the analyst finds AMD’s Ryzen chips boast two-times the number of processor cores at like costs “translates to better multi-tasking/productivity” and bodes well for the chip giant. Meanwhile, “AMD is getting broader OEM [PC original equipment manufacturer] placement which should help accelerate sales in the second half,” asserts Arya.

Contending the preliminary take on freshly launched Vega gaming graphics cards are favorable, the analyst surmises with positive conviction that these reviews “are mostly positive and demand appears to be strong as popular online retail site NewEgg sold out of its initial allotment within 15 minutes.”

TipRanks analytics reveal AMD as a Buy. Out of 23 analysts polled by TipRanks in the last 3 months, 9 are bullish on Advanced Micro Devices stock, 11 remain sidelined, and 3 are bearish on the stock. With a return potential of 8%, the stock’s consensus target price stands at $14.08.

Micron Gets a ‘Vote of Confidence’ from Ernie Maddock

Even though CFO Ernie Maddock has not bought Micron Technology, Inc. (NASDAQ:MU) stock since December of two years prior, the chip giant filed a Form-4 after yesterday’s bell indicating Maddock saw fit to purchase over 3,400 shares- this time at $27.89.

Top analyst Vijay Rakesh at Mizuho takes this as a key “vote of confidence for MU investors,” which between Maddock’s backing bet as well as recent robust DRAM pricing and NAND pricing on a meaningful upward wave have him anticipating upside in the back half of the year.

With fourth fiscal quarter DRAM pricing guided to roughly 5% quarter-over-quarter topline growth and notably solid DRAM pricing at play, the analyst believes, “DRAM contract price through June-July is up 5-6% q/q and could point to upside to the AugQ guide.”

Moreover, upside seems even more feasible considering “NovQ consensus looks low,” as Rakesh comments, “As we have noted, the NovQ topline consensus is for flat q/q growth, well below typical AugQ five-year historical average seasonality of a topline increase of ~12% q/q. We believe with the iPhone build potentially pushed into the NovQ it should see upside versus the current flat q/ q consensus.”

True, “Near-term, Samsung has noted NAND and DRAM is tight in 2H17 with Enterprise SSDs, new Server launches (Purley and EPYC) and demand for HBM (high bandwidth DRAM) for GPUs,” but the analyst sees the situation as rosy for Micron nonetheless, surmising, “We continue to see upside in MU into 2H17 with strong fundamental trends and attractive valuations (trading at ~4.6x F18E EPS) as the cheapest memory OEM globally.”

Vijay Rakesh has a very good TipRanks score with a 71% success rate and a high ranking of #35 out of 4,627 analysts. Rakesh garners 27.1% in his annual returns. When recommending MU, Rakesh garners 44.2% in average profits on the stock.

TipRanks analytics showcase MU as a Strong Buy. Based on 19 analysts polled by TipRanks in the last 3 months, 16 rate a Buy on Micron stock, 2 maintain a Hold, while 1 issues a Sell on the stock. With a return potential of nearly 40%, the stock’s consensus target price stands at $41.43.

 

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