Top Analysts See Massive Industry Potential for Advanced Micro Devices, Inc. (AMD) and NVIDIA Corporation (NVDA)


Two of Wall Street’s best-performing analysts are out with glimmering forecasts on two leading chip giants: Advanced Micro Devices, Inc. (NASDAQ:AMD) and NVIDIA Corporation (NASDAQ:NVDA). Jefferies is lifting sales projections on AMD, as the analyst points to big hopes for Ryzen’s launch. Likewise, B. Riley thinks it is time for NVDA to get the credit its due despite rival, swirling Intel hype, believing NVDA is ready to be a true industry leader with its Bosch alliance. Let’s dive in:

AMD Raring to Conquer the Performance Market

Top analyst Mark Lipacis at Jefferies foresees a solid road ahead for AMD paved by its Ryzen launch, rendering him more confident on the chip giant’s prospects. As such, the analyst reiterates a Buy rating on shares of AMD while boosting the price target from $13 to $16, which represents a just under 17% increase from where the stock is currently trading.

Lipacis opines, “We increase our sales estimates with better visibility into AMD’s Ryzen 7 high-performance and Ryzen 5 power-performance desktop processor launch. We think AMD’s ability to price between-the-seams while achieving competitive performance will result in meaningful share gains from INTC in the Desktop, Server, and Notebook markets starting in 2017. We raise our estimates and remain 700bps/17c ahead of sales/EPS consensus for 2017.”

When assessing checks, the analyst has observed AMD’s Zen products have been met with enthusiasm in both the DT channel as well as in the Asian Cloud Server market. Though presently the giant’s Ryzen 7 SKUs range within $499 to $329 and Ryzen 5 SKUs gravitate between $249 and $169, Lipacis anticipates even more attractive price tags to roll out as the year passes.

Is “Double-Digit Market Share In Reach?” for AMD? The analyst’s vote is a yes. “As AMD continues to roll out its Ryzen product offerings, we think incremental share gains will continue to expand in the near term, while AMD’s goal is to return to double-digit penetration in these markets over time. Our scenario analysis assuming AMD’s Zen-based MPUs capture 5%, 10%, or 15% of the Performance Desktop market would represent incremental sales of $0.4B to $2.0B,” Lipacis concludes, predicting that “the successful adoption of AMD processors” is well within the giant’s grasp.

Mark Lipacis has a very good TipRanks score with a 77% success rate and a high ranking of #3 out of 4,549 analysts. Lipacis realizes 29.2% in his annual returns. When recommending AMD, Lipacis yields 63.8% in average profits on the stock.

TipRanks analytics show AMD as a Buy. Out of 19 analysts polled by TipRanks in the last 3 months, 9 are bullish on AMD stock, 9 remain sidelined, and 1 is bearish on the stock. With a loss potential of 16%, the stock’s consensus target price stands at $11.56.

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

NVIDIA and Bosch Ready to Rumble Past Intel Hype

Top analyst Craig Ellis at B. Riley highlights his takeaways on NVDA on back of last week’s Bosch Connected World conference, where CEO Jen-Hsun Huang gave the keynote address, “unveiling a few new developments” along the way. In reaction, the analyst reiterates a Buy rating with a price target of $135, which represents a 27% increase from where the shares last closed.

The Bosch conference resonates with significance on the heels of the chip giant’s partnership with the automotive supplier on its Xavier processor. Ellis predicts industry dominion waiting in the wings for NVIDIA, as he asserts, “We believe Xavier’s power and performance could lead the industry for years to come.”

Moreover, the analyst sees NVIDIA as overlooked in the shadows of Intel’s $15 billion Mobileye acquisition. Yet, that does not mean that the chip giant’s prospects do not merit just as much excitement, and Ellis urges investors to pay attention.

What does this partnership hold in store for NVIDIA? From the analyst’s eyes, this bodes well on a variety of levels, surmising, “First, a shared keynote with Bosch executives shows the new partnership is on solid ground. Bosch will ship an autopilot module based on Volta‐based Xavier in 2018. Further, Huang noted some new Xavier specs ‐ operating at 30 watts while crunching 30 trillion calculations per second, exceptional power and performance. PCAR $69.11 (NR) was also unveiled as an autopilot development partner, complimenting Audi (Volkswagen’s (VOW‐ETR (NR) tech leader), Mercedes (DAI‐ETR (NR)), Bosch, Tesla $261.92 (NR) and Volvo. NVDA has previously framed the truck market at ~300MM operating units, a substantial SAM. We believe these show 2016’s ~1,555 auto‐related AI engagements, up 10x yy, are undeterred by competitor consolidation. RILY’s F18&19 forecasts are $527.0MM and $871.0MM.”

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, top five-star analyst Craig Ellis has achieved a high ranking of #32 out of 4,549 analysts. Ellis upholds a 78% success rate and garners 29.1% in his yearly returns. When recommending NVDA, Ellis gains 75.4% in average profits on the stock.

TipRanks analytics demonstrate NVDA as a Buy. Based on 27 analysts polled by TipRanks in the last 3 months, 14 rate a Buy on NVDIA stock, 9 maintain a Hold, while 4 issue a Sell. The 12-month average price target stands at $117.10, marking a nearly 11% upside from where the stock is currently trading.

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

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