Analysts Give Competitive Advantage to Advanced Micro Devices, Inc. (AMD) and Alphabet Inc (GOOGL)


With Advanced Micro Devices, Inc. (NASDAQ:AMD) introducing its new Zen-based Ryzen desktop into the market and Alphabet Inc (NASDAQ:GOOGL) announcing YouTube will now be offering a TV subscription to its user base, analysts from Rosenblatt and Baird are riding the bullish train on these two tech giants. One analyst believes Intel Corporation (NASDAQ:INTC) should be quaking, as AMD prepares to take the market by storm. Meanwhile, one of the top analysts on the Street is confident on Alphabet’s standing, predicting long-term growth lies ahead. Let’s dive in:

AMD Offers Better Performing Desktop Than INTC at a Fraction of the Cost

Rosenblatt analyst Hans Mosesmann sees this week as an enticing time to chime in on AMD with the chip giant primed to accelerate desktop gains and re-capture the market from competitor Intel, thanks to AMD’s new Ryzen release. March is about to treat the chip giant well.

In reaction, the analyst reiterates a Buy rating on shares of AMD with a $16.50 price target, which represents a 13% increase from where the stock is currently trading.

Mosesmann sees AMD’s zen launch as one that is enough to rattle INTC investors, as he explains, “Zen-based Ryzen 7 desktop x86 CPU (available now) has disrupted the desktop PC gaming segment with the value proposition of half the price (of a ~$1K high end 8-core i7 series from Intel […] at better performance (~5%). Fair enough. AMD should gain share in desktops. The angle here is that gamers are likely to use that $500 savings to spend on a better display, or GPU card, or storage solution. An incremental tail wind for GPU spend. BUT the real take-way: The 8-core Ryzen 7 is a 95 watt rated CPU, over 30% more thrifty on energy than Intel’s 8-core i7 6900K. This is an eyebrow-raising event to say the least and likely due to a very efficient design not easily solved by Intel in the near-term (process or architecture-wise).”

“We are in the camp of AMD re-capturing 10% or more of the x86 market in dollars (PC and server) as they did 7-8 years ago,” Mosesmann surmises.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, five-star analyst Hans Mosesmann is ranked #357 out of 4,503 analysts. Mosesmann has a 54% success rate and realizes 12.3% in his annual returns. However, when suggesting AMD, Mosesmann loses 24.4% in average profits on the stock.

TipRanks analytics demonstrate AMD as a Buy. Out of 22 analysts polled by TipRanks in the last 3 months, 10 are bullish on AMD stock, 10 remain sidelined, and 2 are bearish on the stock. With a loss potential of 25%, the stock’s consensus target price stands at $10.92.

Alphabet Raring to Take on Amazon/Prime and Netflix with New YouTube TV

Alphabet revealed yesterday YouTube is ready to make a serious play into the over-the-top (OTT) content world by entering a highly-anticipated TV subscription offering into the mix. From the eyes of Baird top analyst Colin Sebastian, this move affirms Alphabet is “[…] taking OTT more seriously,” and he commends the undertaking as strategic.

Therefore, as YouTube TV takes careful “aim at offline ad budgets,” the analyst reiterates an Outperform rating on GOOGL with a price target of $960, which represents a 12% increase from where the shares last closed.

Sebastian opines, “YouTube TV announcement suggests Google taking OTT more seriously. While long-rumored, yesterday’s announcement of YouTube TV subscription serve more formally established Google/YouTube as a player in the over-the-top (OTT) content and distribution market, and set to compete more directly with legacy cable/satellite networks as well as pure-play online subscription alternatives (e.g. Amazon/Prime Instant Video, Netflix.) We believe Google/YouTube is well positioned in the market with a large 1 billion+ active user base, significant streaming/download capabilities, and resources to license and create content.”

In fact, the analyst projects this step will not only generate further subscription revenue growth, but the news could also […] accelerate the migration of linear TV ad budgets online.”

Overall, “Investments in original content likely to continue. We believe accelerated investment in owned/licensed and live content (YouTube mobile live streaming rolled out to channels with >10,000 subscribers) will be an important long-term driver of YouTube growth,” concludes Sebastian.

Colin Sebastian has a very good TipRanks score with a high ranking of #17 out of 4,503 analysts and a 78% success rate. Sebastian earns 18.9% in his yearly returns. When recommending GOOGL, Sebastian garners 17.0% in average profits on the stock.

TipRanks analytics exhibit GOOGL as a Strong Buy. Based on 28 analysts polled by TipRanks in the last 3 months, 26 rate a Buy on Alphabet stock, 1 maintains a Hold, while 1 issues a Sell. The 12-month average price target stands at $1,002.00, marking a 17% upside from where the stock is currently trading.

More stocks covered by top performing analysts can be found here.

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