Canccord analyst Matt Ramsay weighs in on chip makers Advanced Micro Devices, Inc. (NASDAQ:AMD) and NVIDIA Corporation (NASDAQ:NVDA), after attending the Hot Chips conference in Cupertino, California, on Monday. Let’s take a closer look.
Advanced Micro Devices, Inc.
Advanced Micro Devices is stepping into the ring with new competitive gloves and many catalysts to come. On the heels of attending the Hot Chips industry conference, where the leading chip maker unveiled additional details surrounding its Zen CPU technology, Ramsay remains confident in AMD’s re-emergence in the CPU world.
Ramsay reiterates a Buy rating on shares of AMD, while raising the price target from $7.50 to $8.50, which represents a nearly 14% increase from where the stock is currently trading.
Following the conference, Ramsay notes a few key takeaways. First, the analyst highlights AMD’s re-emergence as a “competitive second source to Intel.” Additionally, Ramsay points to gradual unit share recovery with Polaris and Vega as well as the company’s “unique position” with prominent gaming console partners Microsoft and Sony.
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Ramsay concludes, “While we recognize that roadmap execution, competition and financial risks remain, we remain impressed with the new management team and anticipate a quick recovery to solid profitability given lower expenses necessitated by the company’s recent struggles. Finally, we believe risk/reward remains unbalanced to the upside despite the recent stock move and we reiterate our BUY rating and raise our price target to $8.50 given gradually increasing confidence in the CPU and GPU roadmaps and in 14nm yields at partner Global Foundries given foundry influences from both Samsung and IBM.”
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 #202 out of 4,127 analysts. Ramsay has a 62% success rate and realizes 9.9% in his annual returns. When recommending AMD, Ramsay earns 26.5% in average profits on the stock.
TipRanks analytics exhibit AMD as a Hold. Based on 15 analysts polled in the last 3 months, 4 rate a Buy on AMD, 5 maintain a Hold, while 6 issue a Sell. The 12-month average price target stands at $5.30, marking a 29% downside from where the shares last closed.
NVIDIA is in full transformation swing as it has evolved from a PC-leveraged GPU supplier to a comprehensive visual-computing company. For Canaccord’s Matt Ramsay, the transformation is officially complete, with the analyst commending the graphics card giant for growth and overall earnings power.
Presently, the analyst points to four target growth markets, which show gaming, enterprise, HPC/cloud, and automotive as driving forces for NVDA, now carrying over 90% of non-IPR revenue.
On the heels of new details for the company’s Pascal and Parker processors, information that NVIDIA technical leaders revealed at the Hot Chips industry conference, Ramsay reiterates a Buy rating on NVDA with a price target of $70, which represents just under a 14% increase from where the shares last closed.
Ramsay asserts, “While we believe many investors appreciate the performance gains across gaming and deep learning markets brought by Pascal, we were impressed with the significant performance jump for autonomous driving and gaming console applications Parker is likely to bring into the NVIDIA roadmap.”
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“As applications of highly parallel GPU computing expand and developer tools and deep learning algorithms mature, our positive thesis continues to play out with strong gaming GPU growth expected to continue near term with the Pascal ramp and we believe new trends including deep learning, virtual/ augmented reality, and autonomous driving will catalyze new market growth longer term,” the analyst concludes.
According to TipRanks, five-star analyst Matt Ramsay is ranked #202 out of 4,127 analysts. Ramsay has a 62% success rate and realizes 9.9% in his annual returns. When recommending NVDA, Ramsay earns 59.8% in average profits on the stock.
TipRanks analytics demonstrate NVDA as a Buy. Based on 21 analysts polled in the last 3 months, 12 rate a Buy on NVDA, 7 maintain a Hold, while 2 issue a Sell. The consensus price target stands at $65.41, marking a 6% upside fro where the stock is currently trading.