Bank Of America Likes Intel, Advanced Micro Devices; Keep An Eye On Analyst Day

Better Pricing But Lower PC Units

PC MPU

• First quarter PC client (desktop and notebook) MPU shipments fell 3.4 percent year-over-year.
• PC inventories remain "mostly in check" as total PC client MPU shipments fell 10.1 percent in the quarter, which was in line with seasonal trends.
• PC client unit share between Intel (91.4 percent) and AMD (8.6 percent) also remained unchanged in the quarter.
• AMD did gain 150 basis points of share in desktop but this was offset by Intel's gain in notebooks.

A Closer Look At Ryzen

The analyst's research concluded that AMD shipped 307,000 Ryzen units in the quarter, of which 76 percent were high-end products. Ryzen also sold at ASP of $248, which implies $76 million in Ryzen-related revenues in the quarter.

Overall, Ryzen contributed a 20 percent improvement in AMD's total MPU ASP.

Game Consoles

Arya further noted AMD's semi-custom unit shipments allocated toward game consoles fell 24 percent quarter-over-quarter but did grow 2 percent from a year ago. AMD likely benefited from the tail-end of the PlayStation VR/PS4 Pro and an Xbox console ramp, which started in the third quarter.

Stock Recommendations

AMD remains Buy rated with a $16.50 price target as the company could report operating margins "well above" the Street's expectations from new product launches. Also, the company's upcoming analyst day on May 16 could prove to be the next catalyst for the stock.