Market Overview

AMD's Setup Gives Rosenblatt Securities Deja Vu

AMD's Setup Gives Rosenblatt Securities Deja Vu
Related AMD
The Chips Are Down: Weak Forecasts Hurt Semiconductor Stocks
Friday Follies: Brexit, Semiconductor, And Tariffs All Take Center Stage
AskSlim Market Week - Saturday, Nov. 17 (TalkMarkets)

Advanced Micro Devices, Inc. (NASDAQ: AMD) has been of the tech sector's hottest stocks in 2018. Now that shares have made it to the $30 mark, one analyst is raising their price target bar even higher.

The Analyst

Rosenblatt Securities analyst Hans Mosesmann reiterated a Buy rating on AMD and raised the price target by 33 percent from $30 to $40.

The Thesis

AMD resembles NVIDIA Corporation (NASDAQ: NVDA) stock three years ago, prior to its 1,100-percent gain, Mosesmann said in a Tuesday note. (See his track record here.) 

AMD stock is already up 194 percent year-to-date, but Mosesmann said there could be significantly more upside in the mid-to-longer term.

After a recent meeting with suppliers in Taiwan, Mosesmann said demand for certain AMD GPU “compute” SKUs and Intel Corporation (NASDAQ: INTC) PC CPUs has created a capacity “tightness” that will likely last for the next several quarters.

“The above dynamic suggests to us that AMD’s pre-emptive thrust with its 7nm GPU compute offerings (ramping in 1Q18 and one to two quarters ahead of AMD’s own 7nm-based EPYC2 CPUs) is a ramp that could mirror or improve on the current overall EPYC CPU ramp (5-percent share 12-18 months from launch and 10 percent 12 months later), for 2019-20." 

The analyst cautioned investors that CPU market share gains tend to occur relatively slowly compared to the meteoric gains in AMD stock in recent months, suggesting a pullback is within the realm of possibility if expectations overheat in the near-term.

Rosenblatt is forecasting a 5-percent server CPU market share for AMD in Q4 of 2018 and up to 10-percent market share over the next four to five quarters.

Price Action

AMD shares were trading near-flat at the time of publication Tuesday at $29.90. 

Related Links:

The Hot Chips 2018 Conference: Morgan Stanley's Takeaways

What Wall Street Thinks Of Nvidia's Q2 Earnings

Latest Ratings for AMD

Oct 2018BairdMaintainsNeutralNeutral
Oct 2018BMO CapitalMaintainsMarket PerformMarket Perform
Oct 2018BarclaysUpgradesUnderweightEqual-Weight

View More Analyst Ratings for AMD
View the Latest Analyst Ratings

Posted-In: Hans Mosesmann Rosenblatt SecuritiesAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga


Related Articles (INTC + AMD)

View Comments and Join the Discussion!

Latest Ratings

CPAImperial CapitalDowngrades68.0
PRMWImperial CapitalInitiates Coverage On18.0
TGTKeyBancInitiates Coverage On110.0
QCOMMorgan StanleyUpgrades0.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Sunrun's Execution Risk, Cost Trajectory Concerns Have Eased, BofA Says In Upgrade

Trading Hurricane Florence: Investors Make Storm Stock Picks