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Julie Lamb

About the Author Julie Lamb

Julie graduated with a Bachelor of Arts in English with a focus on creative writing from the University of Louisville.

Will Crypto Risk Hang Over Advanced Micro Devices (AMD) Shares? Wells Fargo Weighs In

David Wong is upbeat on AMD's sharpening competitive edge in microprocessor to graphics markets.


Wells Fargo analyst David Wong is putting his bullish chips behind Advanced Micro Devices, Inc.’s (NASDAQ:AMD) share momentum, giving confident odds here over any crypto risk on the horizon.

Watch out for market share gains this year, cheers Wong, who is confident that the company’s refresh of its major product families from microprocessor to graphics will help the chip giant “close the competitive gap.” Though the company may confront cryptocurrency-related headwinds in 2018, Wong anticipates market share momentum running full bullish steam ahead should prove to be an advantageous offset.

Therefore, the analyst reiterates an Outperform rating on AMD stock with an $18 price target, which implies a 79% upside from current levels. (To watch Wong’s track record, click here)

The past year, the chip giant’s team has been in full refresh mode for desktop, server, and notebook microprocessors along with discrete graphics products- “every one of its major product lines” got an enticing revamp, argues Wong. As of the start of last year, the analyst gave Intel the lead in both microprocessor technology and performance “by several years” – before the company turned launch machine with these products. Present day, the company’s competitive edge looks much more encouraging in server, desktop, as well as notebook processors.

“We believe that Ryzen help AMD improve its desktop microprocessor unit share from a low of close to 9% in the September 2016 quarter to about 12% by the December 2017 quarter, desktop processor ASPs, from close to $50 in 2016, to close to $80 through 2017. With the launch of Ryzen APUs in early 2018 we think that AMD meaningfully expanded the proportion of the desktop processor space it addresses with Ryzen. We think that this will lead to continuing desktop processor market share gains, and further ASP improvement, through 2018,” notes the analyst.

Moreover, Wong continues likewise confident on server microprocessor prospects: “The launch of EPYC in June 2017 helped AMD lift its server microprocessor market share slightly. We think that AMD could get to a unit market share of close to 5% exiting 2017. Should AMD execute well in bringing out a follow-on EPYC offering that offers solid performance we think that AMD’s server processor unit market share could rise to as much as 10% exiting 2019.”

Both notebook processor unit share to average selling prices could seen upturn this summer, with Wong angling for share momentum to ramp throughout the back half of this year. By 2020, the analyst bets the giant can double its notebook unit share; and anticipates desktop and notebook GPU unit market share could circle 40% in two years’ time. These are the very GPU share gains that have the analyst concluding his bullish research note on AMD with confidence, even amid a drop in demand for GPUs utilized in crypto mining.

According to TipRanks data pooled from analysts across the Street, consensus sentiment rings bullish for AMD. Out of 16 analysts polled in the last 3 months, 9 are bullish on AMD, 4 remain sidelined, while 3 are bearish on the stock.