Jefferies Lifts PT On AMD After Intel Chip Delay

Jefferies raised the price target on chipmaker Advanced Micro Devices on Tuesday after its rival Intel announced delay in its 7-nanometer (nm) transistor last last month.

Jefferies analyst Mark Lipacis increased the stock’s price target to $95 (22.3% upside potential) from $86, and reiterated a Buy rating. Lipacis believes that the delay in Intel’s (INTC) 7nm transistor, following its 10nm transistor delays, would help AMD (AMD) to gain market share.

The analyst noted that Intel’s “transistor challenges are systemic and that TSMC/AMD’s transistor lead will extend”. As a result, he expects “AMD share gains will accelerate, and that the AMD bull-case will morph from 30% market share to 50% over the next 12-18 months.”

Like Jefferies, Merrill Lynch analyst Vivek Arya says Intel’s 7-nm chip delay “could accelerate AMD market share gains back toward their historical peaks of 20% for PC and 25% servers, up from 17% and 10%, today.” On July 29, Arya also pushed up the stock’s price target to $100 (28.8% upside potential) from $77, with a Buy rating.

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 14 Buys, 11 Holds, and 1 Sell. The average price target of $79.41 implies upside potential of 2.2% to current levels. (See AMD stock analysis on TipRanks).

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