After hosting a series of focused investor meetings with Advanced Micro Devices, Inc. (NASDAQ:AMD) CEO Dr. Lisa Su throughout the past three weeks in California, Boston, and the mid-Atlantic, top analyst Matt Ramsay at Canaccord has come forth even more confident on the chip giant’s seesaw between risks and rewards pointing in AMD’s favor.
In reaction, the analyst reiterates a Buy rating on shares of AMD while lifting the price target from $14 to $17, which represents a 26% increase from where the stock is currently trading.
Ramsay asserts, “[…] we leave more confident in our positive thesis, despite the recent stock appreciation and volatility, and continue to gain confidence in 1) AMD re-emerging as a competitive second source to Intel (with leadership in several sub-segments) with an on-track Zen roadmap across relevant x86 CPU markets including enterprise/gaming desktops, media-focused notebooks and certain server market segments, 2) gradual GPU unit share recovery in low market tiers with Polaris should be supplemented by the Vega launch in higher-value tiers, and 3) AMD now being focused to deliver a multi-generational roadmap with the customer backing and foundry partners to sustainably do so. Modest growth assumptions across a $50B+ TAM from very low CPU/GPU share levels today drive our estimates materially above consensus, as much skepticism still remains.”
Looking ahead, the analyst is aware of AMD’s struggles with “roadmap execution” as well as rivalry in the field, but ultimately concludes that the “risk/reward is still tilted toward upside,” anticipating it well within the chip giant’s grasp to achieve $1.00 in EPS by the year 2020.
Matt Ramsay has a very good TipRanks score with a 62% success rate and a high ranking of #75 out of 4,515 analysts. Ramsay garners 19.7% in his annual returns. When recommending AMD, Ramsay gains 82.2% in average profits on the stock.
TipRanks analytics show AMD as a Buy. Out of 21 analysts polled by TipRanks in the last 3 months, 9 are bullish on AMD stock, 10 remain sidelined, and 2 are bearish on the stock. With a loss potential of nearly 19%, the stock’s consensus target price stands at $10.86.
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