Stocks of Advanced Micro Devices Inc. switched to the semiconductor market on Wednesday following Intel Corp.’s announcement of next-generation chips next week, after the chip company indicated a strong second quarter and a sea change in Outlook’s semiconductor market.
Shares reached a record high of $ 77.19 on Wednesday, and were up 13% at $ 76.27, following a record open of $ 75.50.
AMD shares are up 66% for the year, compared to a 13% gain for the PHLX Semiconductor Index SOX
Tech-Heavy Nasdaq Composite Index Comp up 17%
And a 0.4% increase in the S&P 500 Index SPX,
At the end of Tuesday, AMD topped Wall Street estimates on its quarterly results and outlook, fueling an all-year outlook that was considered optimistic even before the COVID-19 pandemic hit.
Analysts on average raised their revenue estimates for AMD for the third quarter from $ 2.31 billion to $ 2.31 billion, after AMD forecast sales of $ 2.45 billion to $ 2.65 billion. For the year, Wall Street sees revenue of $ 8.4 billion to $ 8.72 billion, following AMD’s annual sales forecast of approximately 8.88 billion.
Susquehanna financial analyst Christopher Roland upgraded AMD from neutral to a positive rating as the company was “capitalizing on Intel’s 7-nm faceplant”. Roland raised his price target from $ 64 to $ 85.
Roland mentioned last week’s surprise announcement that Intel Corp. INTC,
It was delayed to release its 7-nanometer chips until at least the end of 2022 due to manufacturing issues. Intel shares shed nearly 2% on Wednesday, and are down 19% on the year.
Chip parlance, in nanometers or nm, refers to the size of the transistor moving to a computer chip, with the general rule that smaller transistors are faster and more efficient at using power. On the other hand, AMD already sells 7-nm chips, and by 2020 has spent releasing more and more versions of them.
Roland saw AMD occupying a 20% share of servers by 2023, following an announcement by the company that it had reached its goal of a “double-digit” market share of the server market. By 2023, Roland also sees AMD at 35% of the notebook market, up from the current 20%; 40% desktop, up from 20%, and 10% share of data-center GPU, up from 3% today.
Read:AMD is set for blockbuster second half, but not guaranteed
Of the 36 analysts covering AMD, 14 have an overweight or buy rating, 19 have a rating, and three have a sell rating. Of those, 20 increased their price target on the stock, resulting in an average price target of $ 70.68, up from an average of $ 55.68, according to FactSet data.
Bernstein analyst Stacey Rasgon, who has a rating on AMD and raised her price target from $ 45 to $ 70, said that while some critics may complain that AMD’s operating expenses are limiting earnings per share, Now is the time for the company to invest in its operations “It is important for them to strengthen their position in view of Intel’s conflicts.”
“And at that end, the emerging reversal of fortune between the two companies is entering the realm of mind as AMD appears to be emerging for a change, while their larger competitor Flundar,” Rasgon said.
Jefferies analyst Mark Lipakis, who has a rating and raised his price target from $ 63 to $ 63, called the second quarter a “watershed” event for AMD, in which he hopes to accelerate AMD’s stock advantage over Intel Of.
Copen analyst Matthew Ramsay, who has an outperform rating and raised his price target from $ 65 to $ 90, said AMD’s “strong results and (more importantly) continuity of product execution are in stark contrast to Intel’s roadmap stumbles.” “
“Although significant progress to date, we believe AMD’s share gains are beginning to play in the market with 7nm servers, desktops and GPU products over the past few quarters and 7nm notebooks,” said Ramsay.
Oppenheimer analyst Rick Schaffer said in a note titled “Let’s Start Games !,” that AMD was a “compelling growth” story, but that it was about to wait on the sidelines due to the stock’s high valuations. Schafer has a performance rating on AMD.
Scheffer cautioned that while he believes AMD may increase its market share in the server market, Taiwan semiconductor manufacturing company may “limit further lead to 7nm availability at TSM”
Which manufactures AMD chips. TSMC’s US depository receipts were up 5% in recent business.