Advanced Micro Devices (AMD) is getting yet another vote of confidence, as Cowen’s top analyst Matt Ramsay raised his target price on AMD from $30 to $33 due to Intel’s (INTC) perceived issues with its 14nm chip shortages. Furthermore, the analyst believes AMD’s improved 7nm products are positioned to pounce on the consequences of Intel’s recent customer missteps into 2H19/20. All in all, the analyst rates AMD stock an Outperform.
Ramsay commented, “We are raising our 2H18 and 1Q19 estimates as we believe AMD is poised to benefit in portions of the PC market due to Intel’s 14nm capacity constraints. We believe this upside in terms of Ryzen Mobile notebook volumes in particular should be enough to offset channel inventory sell-in headwinds in the low/mid tier GPU market, and tough Y/Y crypto comps for Q4/Q1 (headwinds we believe are temporary). In fact, our work indicates Intel is prioritizing Apple modem and cloud-focused server silicon supply, leaving some mid-tier server OEMs and essentially all low- and mid-tier notebook OEMs short of x86 CPU supply for holiday and Chinese New Year products.”
“This is all taking place as AMD ramps a more complete and competitive lineup of desktop and notebook CPUs on 12nm at GF, and anticipation of a MUCH stronger lineup in 2019 on 7nm silicon from TSMC (particularly in notebook where TSMC’s low-power, high-frequency silicon expertise could prove transformative to AMD’s roadmap),” the analyst added.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Matt Ramsay has a yearly average return of 24.3% and a 61% success rate. Ramsay has a 58.6% average return when recommending AMD, and is ranked #82 out of 4893 analysts.
Overall, the initial word hovering around this chip giant points to the bulls, as TipRanks analytics exhibit AMD as a Buy. Out of 24 analysts polled in the last 3 months, 10 are bullish on AMD stock while 11 remain sidelined, and only 3 are bearish. The 12-month average price target stands at $28.27, marking a 9% upside from where the stock is currently trading. (See AMD’s price targets and analyst ratings on TipRanks)