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AMD's Setup Gives Rosenblatt Securities Deja Vu

AMD's Setup Gives Rosenblatt Securities Deja Vu
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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

Sep 2018KeyBancInitiates Coverage OnSector Weight
Sep 2018RBC CapitalInitiates Coverage OnOutperform
Sep 2018Stifel NicolausMaintainsBuyBuy

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


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