Market Overview

Argus On AMD's Earnings: Sustainable Growth Prospects Lead To Upgrade

Share:
Argus On AMD's Earnings: Sustainable Growth Prospects Lead To Upgrade
Related AMD
Intel CEO Comments On Giving Up Market Share To AMD
What The Latest Steam Gaming Data Means For AMD, Nvidia
Micron: Still Undervalued And Should Beat On Earnings (Seeking Alpha)

Advanced Micro Devices, Inc. (NASDAQ: AMD)'s fourth-quarter earnings report on Tuesday was compelling enough for Argus to turn bullish on the stock.

The Analyst

Argus' Jim Kelleher upgraded AMD's stock rating from Hold to Buy with an $18 price target.

The Thesis

AMD's earnings report made it clear that the business model boasts a sustainable path toward profitability — along with top-line and bottom-line growth — over time, Kelleher said in the upgrade note. As the company moved beyond the seasonally strong second half of 2017, its outlook remains favorable, as evidenced by top-line guidance for the first quarter which came in 25 percent ahead of consensus estimates.

AMD continues to benefit from improving execution in its high-cost and high-performance products, the analyst said. This positions the company well to take advantage of the global momentum in multiple categories, including client and server compute, graphics processing, consumer gaming and electronics, along with "promising" markets in cloud data center, artificial intelligence, machine learning, blockchain and others, according to Argus.

Although AMD's profit margins are not yet "industry competitive," the company's growth potential will increase over time and the company will start closing the gap with its stronger peers, Kelleher said. 

Price Action

Shares of AMD were trading lower by around 0.2 percent ahead of Thursday's market open.

Related Links:

Analysts Remain Divided On AMD After Earnings Beat

AMD's Earnings Aren't Enough To Support Its Valuation, Analyst Says

Latest Ratings for AMD

DateFirmActionFromTo
Jun 2018Stifel NicolausMaintainsBuyBuy
May 2018Cowen & Co.Initiates Coverage OnOutperform
May 2018SusquehannaUpgradesNegativeNeutral

View More Analyst Ratings for AMD
View the Latest Analyst Ratings

Posted-In: Argus Blockchain chipsAnalyst Color Upgrades Price Target Top Stories Analyst Ratings Best of Benzinga

 

Related Articles (AMD)

View Comments and Join the Discussion!