AMD's Product Road Map Remains 'On Track,' Analyst Believes Stock Will Outperform

Advanced Micro Devices, Inc. AMD is a classic example of "the market giveth, the market taketh away." After soaring more than 10 percent Tuesday, the stock gave up almost of all its gains Wednesday as the company's investor day presentation failed to sustain the buying momentum.

AMD hosted its analyst day presentation, which prompted some bullish analysts to revise their ratings lower. BMO Capital Markets' Ambrish Srivastava isn't among the crowd as the analyst maintained an Outperform rating on AMD's stock with an unchanged $15 price target.

Road Map And Financial Clarity

Heading into the presentation, Srivastava said in a report on Monday that expectations were high and his view of the stock could move negative if the presentation fell short of expectations. However, the analyst stated AMD offered "more details than we are accustomed to" in terms of both the product road map and financial outlook.

Srivastava did acknowledge that some among the Street are disappointed with AMD's longer-term earnings per share guidance of $0.75. He believes the outlook is one management felt was "reasonable" at this stage in its turnaround.

The analyst also believes the likelihood of AMD implementing additional intellectual property licensing opportunities is "high" and any such deal isn't factored into the long-term earnings per share target.

Finally, Srivastava noted that artificial intelligence and machine learning technologies represents a large opportunity for AMD and the company's total addressable market estimate of $5 billion is in-line with what he believes it to be.

Bottom line, AMD's product road map remains "on track" and the company's management did a good job in communicating its upcoming products which supports the bullish case.

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Image Credit: Advanced Micro Devices, Inc. (AMD) [Attribution], via Wikimedia Commons