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AMD stock hits record highs as chip maker takes bigger market share than Intel

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Advanced Micro Devices Inc. Stocks hit record highs on Wednesday as Wall Street analysts looked set to deliver the chipmaker’s powerful results: AMD will eat more of Intel Corp’s lunch. For a few years at fewest, with a little aid from her friends.

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AMD shares rose more than 6% Wednesday morning, topping $96 a share and tracking toward a record close. The stock final closed at an all-time lofty of $97.25 on Jan. 3. 11.

AMD released second-quarter results on Tuesday afternoon that easily beat expectations, and the chip maker once again raised its guidance for the year as data center sales nearly tripled. CEO Lisa Su said AMD is making progress in securing “extra” resources to overcome a global chip shortage.

The report contrasts with struggles from bigger rival Intel, which laid out its product roadmap on Monday and predicted it would burst its position as the chip leader by 2025 as it rebrands its chips, ignoring the use of transistor size to determine performance. Analysts weren’t impressed with Intel’s plan, similar to their response when Intel announced its results final week.

Analysts impressed AMD, with at fewest seven raising their price targets Tuesday morning in response to the results. Christopher Rowland, financial analyst at Susquehanna raised the target price to $130 from $125, bringing up a topic that has gotten a lot of attention lately: AMD is doing well with the chip shortage with “extra” resources because it’s Taiwan Manufacturing Semiconductor Manufacturing Co. The second largest customer – Apple Inc. is the largest. The theory assumes that TSMC has an incentive to pick aspects where Intel seeks to compete with the manufacturer by expanding its third-party foundry business.

“While the AMD procurement team should be commended, we can only imagine TSM supporting their preferred CPU client with additional chips,” said Roland, who has a positive stock rating.

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Coin analyst Matthew Ramsey, with a superior rating and a $120 price target, also touched on this topic.

“For us, the fact that the company continues to feel comfortable delivering impressive growth guidance indicates the strength of its partnership with TSMC and the confidence in demand from major cloud customers and OEMs, which has been gained through innovation and roadmap development over the years,” Ramsay said.

Ramsay also touched on the fact that AMD, which is usually reticent in disclosing data center numbers, said that more than 20% of its revenue came from booming data center sales, and it expects that to grow. Cowen analyst said he now estimates that AMD will get about 25% of its business from server sales in the second half of the year.

Jefferies analyst Mark Lipacis, who has a buyout of the stock, believes that stock gains from Intel will accelerate, and sees data center sales growing exponentially as part of AMD’s business.

“We estimate that AMD’s stock gains will persevere to accelerate,” Libases said, estimating data center sales at about 28% of AMD’s sales by the fourth quarter, up from the “lofty teens” the company acknowledged in the first quarter.

“It was a very clean quarter for AMD, and admittedly there wasn’t a lot to be achieved in these results,” said Bernstein analyst Stacy Rasgon, who has a market performance rating and a $110 price target.

Rasgon said that AMD’s forecast for packed-year revenue growth of 60%, up from its previous forecast of 50% growth, “is firm to sneeze at.”

The Bernstein analyst also said that “gross margins are finally starting to reverse, and it’s clear that Intel’s hopes for a ‘steady’ stake in the back half are a distant dream, with (given Intel’s admissions earlier in the week) that AMD’s competitive window may still be begin to her. years.”

SEE ALSO: Intel seems to be feeling the competitive heat from AMD

Citi Research analyst Christopher Danley, who maintained his impartial valuation due to AMD’s stock price but raised his target to $100 from $95, believes “AMD could persevere on its growth trajectory due to continued production delays at Intel, which we believe could happen to Intel products. 7nm as well.”

“We believe AMD’s server market share gains will accelerate over the next two years due to AMD’s first generation of server CPU products,” Danley said.

Of the 38 analysts covering AMD, 23 have purchase ratings, 13 have grip ratings, and two have sell ratings. Analysts’ average price target rose to $109.46 from $104.22 previously with increases on Tuesday, according to FactSet data.

Over the former 12 months, AMD shares are up 42%. By comparison, the PHLX Semiconductor Index is up 58%, the S&P 500 is up 37%, and the heavy Nasdaq Composite is up 42%.


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