Market Overview

RBC Says AMD Is High Beta Name To Own For 2019: 'It's Profitable To Buy The Stock On Down Days'

Share:
RBC Says AMD Is High Beta Name To Own For 2019: 'It's Profitable To Buy The Stock On Down Days'

Advanced Micro Devices, Inc. (NASDAQ: AMD) shares have soared about 44 percent year-to-date, after a nearly 80-percent rally in 2018.

Notwithstanding the recent run, one RBC Capital Markets analyst still sees an opportunity to build positions in the stock.

The Analyst

Analyst Mitch Steves maintained an Outperform rating on AMD with a $34 price target.

The Thesis

AMD is likely to see gains in notebook market share as early as the second quarter and desktop market share in the third quarter, Steves said in a Wednesday note.

Relative to the more volatile data center and smartphone markets — which take up a larger amount of memory spending — the PC market is still meaningful, particularly for AMD, the analyst said. 

RBC is projecting a small increase in PC units in 2019.

"This would likely create a small multiplier effect as share gains are on higher-than-expected units," Steves said.

AMD could see higher ASPs and gross margins, as the share gains are at the higher end of the market, he said. This would lead to modestly higher EPS, particularly in the second half, the analyst said. 

AMD is likely to continue to show high volatility going forward given the debate around server share gains, PC share gains and ASPs, according to RBC. 

It could be profitable to buy the stock on "down days," which could represent dips of as much as 5 percent, Steves said. 

RBC named AMD as a high beta name to own in 2019, while its core holding for the year is Synopsys, Inc. (NASDAQ: SNPS).

The Price Action

AMD shares were jumping 9.31 percent to $29.24 at the time of publication Wednesday. 

Related Links:

AMD Falls As Major Shareholder Sells

With Semiconductor Demand Uncertain, KeyBanc Presents Stock Ideas

Latest Ratings for AMD

DateFirmActionFromTo
Jan 2021Cowen & Co.MaintainsOutperform
Jan 2021BMO CapitalDowngradesMarket PerformUnderperform
Nov 2020Wells FargoUpgradesEqual-WeightOverweight

View More Analyst Ratings for AMD
View the Latest Analyst Ratings

 

Related Articles (AMD)

View Comments and Join the Discussion!

Posted-In: Mitch Steves RBC Capital MarketsAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga

Latest Ratings

StockFirmActionPT
WWEEvercore ISI GroupUpgrades
INTB of A SecuritiesUpgrades40.0
BLDPBMO CapitalInitiates Coverage On39.0
SSYSStifelInitiates Coverage On40.0
CMGGoldman SachsInitiates Coverage On1,650.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com