At the Computex conference, which just kicked off in Taipei, Advanced Micro Devices (AMD) made quite the splash in its keynote address. The chipmaker announced its new line of Ryzen 7nm processors, which comes with higher power and increased efficiency, as the smaller footprint decreases energy use. More than that, in a performance test the Ryzen 9 3900X beat Intel’s i9-9920X by 16%, while also using less energy and coming in at a price more than half-that of Intel’s flagship product.
On the news, Rosenblatt analyst Hans Mosesmann reiterated a Buy rating on AMD stock with $42 price target, which implies nearly 44% upside from current levels. (To watch Mosesmann’s track record, click here)
AMD’s launch of the 7nm processors is big deal. On its performance, Mosesmann says, “AMD 7nm-based Ryzen 3000 desktop CPUs will meet/beat Intel in single threaded workloads, easily exceed in multi-threaded (25%-35%), and at 30%-35% lower power.” Making matters better for AMD (worse for Intel), prices are “10% to over 50% below Intel counterparts which obviously will place pressure on Intel ASPs.”
Aside from the Ryzen, Mosesmann is excited for AMD’s new 7nm-based Navi GPU. The analyst believes this new developments “sports a new architecture called RDNA that is optimized for efficiency, IPC enhancements, and chiplet scalability,” while also supporting PCIe 4.0. Because of this, Mosesmann believes “AMD is in position to be a much bigger player in high-end GPU gaming given Intel and Nvidia based platforms may not have PCIe 4.0 until next year.”
AMD’s recent keynote is among the many positives coming out of the company of late. Earlier this month, the US government contracted AMD (along with Cray) to develop the world’s most powerful supercomputer. Though this isn’t expected to bring in significant or recurring revenue, it does signal to investors and other organizations that AMD is to be trusted and called on for large projects. Mosesmann believes this project will have “secular implications for all of AMD’s compute businesses.” Most importantly, investors continue to express excitement over the company’s soon-to-be released 7nm chips, which is expected to help continuing narrowing the gap between AMD and Intel, while providing a recurring stream of revenue.
As AMD continues to add new products to its offering, while innovating with new technology, the investment community expects AMD stock to continue to trend upward. TipRanks analysis of 21 analyst ratings show a consensus Moderate Buy rating with 13 analysts Buying, seven Holding and one Selling. The average price target among these analysts stand at $30.31 price target, suggesting the stock can rise about 8% from its current value. (See AMD’s price targets and analyst ratings on TipRanks)
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