Canaccord Analysts Weigh In on Two Semiconductor Giants: Advanced Micro Devices, Inc. (AMD), Intel Corporation (INTC)

Canaccord analysts are weighing in on semiconductor giants Advanced Micro Devices, Inc. (NASDAQ:AMD) and Intel Corporation (NASDAQ:INTC). The analysts reflect on AMD’s Zen performance data, and Intel Developer Forum. Let’s take a closer look:

Advanced Micro Devices, Inc.

Last Wednesday, AMD hosted an event in San Francisco, where the company’s executives offered a deeper insight into the Zen CPU roadmap, the company’s upcoming computer processor microarchitecture expected for release in early 2017, as well as demonstrated promising few initial performance metrics against systems from Intel.

Canaccord analyst Matt Ramsay sees performance levels coupled with catalysts to come for the California multinational semiconductor developer and subsequently reiterates his recently upgraded Buy rating on shares of AMD with a price target of $7.50.

Though Ramsay admits, “While we take company-published benchmark results with enough grains of salt to serve a few margaritas,” the analyst has been left impressed with initial test-silicon performance metrics at levels that put the company back in the market. When Ramsay assesses AMD, he praises an improved product portfolio across gaming and gaming console products and sees real potential for the company to make modest share gains in both the PC and graphics markets.

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Ramsay notes, “While we recognize that roadmap execution, competition and financial risks remain, we remain impressed with the new management team and our estimates assume only modest share recovery in core markets that should yield material upside to consensus and a quick recovery to solid profitability given lower expenses necessitated by the company’s recent struggles. Given several potential upside call options remain, we believe risk/ reward remains unbalanced to the upside despite the recent stock move.”

Ramsay concludes, “Finally, given AMD’s new viability as a second source in important gaming and data center markets, we believe even still skeptical investors can own AMD as a hedge to core holdings in Intel and/or NVIDIA.” Though the analyst is fully aware the company has challenges to overcome, but remains bullish in light of a palpable turnaround that steadily gains steam for AMD.

According to TipRanks, five-star analyst Matt Ramsay is ranked #204 out of 4,122 analysts. Ramsay has a 62% success rate and gains 9.9% in his yearly returns. When recommending AMD, the analyst gains 24.6% in average profits on the stock.

TipRanks analytics exhibit AMD as a Hold. Based on 15 analysts polled by TipRanks in the last 3 months, 4 rate a Buy on AMD, 5 maintain a Hold, while 6 issue a Sell. The consensus price target stands at $5.15, marking a 32% downside from where the shares last closed.Screen Shot 08-22-16 at 04.01 PM

Intel Corporation 

Canaccord analyst Matt Ramsay walks away with two key impressions for the future of Intel Corporation after attending the Intel Developer Forum (IDF) this week in San Fransisco.

First, Ramsay sings the praises of the digital technology platform maker for its breadth of innovation across CPU, n-node silicon, memory, modem, fabric, FPGA, and software continues to diversify at scale.

Second, the analyst sees INTC’s new take on market pragmatism from CEO Brian Krzanich and recently hired Qualcomm-executive Murthy Renduchintala as an exciting, necessary breath of fresh air. Especially in light of the company’s competitive edge in key markets and around use of internal/external IP, Ramsay is left with two significant takeaways that shine light on positive long-term prospects for INTC.

After innovative updates from IDF 2016, Ramsay concludes, “Overall, given better than expected Q2/16 PC results just ahead of the recent expiration of the downloadable Windows 10 upgrade program, ahead of the first full quarter of 14nm Broadwell server CPUs and first material sales of 2nd-generation Xeon Phi, Silicon Photonics and OmniPath fabric products that should combine to push DCG growth back toward the mid-teens target and to double-digits for the full year, and ahead of Intel’s first iPhone modem sales that combined with significant cost cuts should lower mobile business losses dramatically, our positive long-term thesis remains intact. These items combined with an attractive dividend yield and valuation make Intel a compelling core stock holding in our view.”

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Though competitors like Qualcomm, NVIDIA, NXP, and others might be leading INTC in some markets with no end for strong growth in sight, Ramsay is confident in INTC’s position of growth into these markets in the long game. If it comes to a point of survival in “a war of attrition in competitive markets,” Ramsay’s bet is on INTC to rise as the ultimate leader in the end.

The analyst remains set in his positive long-term perspective on Intel, reiterating a Buy rating and price target of $40, which represents just under a 14% increase from where the stock is currently trading.

As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, five-star analyst Matt Ramsay is ranked #204 out of 4,122 analysts. Ramsay has a 62% success rate and gains 9.9% in his yearly returns. When recommending INTC, Ramsay realizes 12.4% in average profits on the stock.

TipRanks analytics demonstrate INTC as a Buy. Based on 28 analysts polled in the last 3 months, 18 rate a Buy on INTC, 7 maintain a Hold, while 3 issue a Sell. The 12-month average price target stands at $37.92, marking a nearly 8% upside from where the shares last closed.

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