The PC supply chain is looking good to Susquehanna analyst Christopher Rolland, who sees a favorable fourth quarter backdrop. Why? “Buyers desire better CPUs, discrete GPUs, and SSDs, all constructive trends for the PC supply chain overall in 4Q17,” writes Rolland.
Highlighting key takeaways from the firm’s PC-SIGnals data report for leading semiconductor players, the analyst may remain on the sidelines on chip giant like Advanced Micro Devices, Inc. (NASDAQ:AMD) and NVIDIA Corporation (NASDAQ:NVDA), but he nonetheless calls for “a boon for the supply chain.” Especially as “PC buyers want better machines,” trends look positive for a chip making atmosphere.
Focusing on AMD’s core business, Rolland opined, “AMD gaining ground in desktop CPU, although the Ryzen mobile ramp appears slow. We note that AMD continued to take desktop CPU share from Intel (up +2.4% to 12.9% in 4Q17). However, Intel still gained a bit of share in laptops as Ryzen Mobile’s limited ramp underwhelms thus far […] AMD also benefits from higher ASP CPUs; Threadripper now live. AMD could beat Street ASP/GM expectations in 4Q17 as Ryzen continued to take share from older AMD processors, driving ASPs up nearly +20% in desktops! We note ~3% of AMD powered desktops contain enthusiast CPU Threadripper, which has ASPs that are 2X premium Ryzen 7s.”
For now, the analyst maintains a Neutral rating on AMD stock with a $15 price target, which implies a 37% upside from current levels, and reiterates a Neutral rating on NVDA stock with a price target of $185, which implies a 6% downside from current levels. (To watch Rolland’s track record, click here)