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Analyst: AMD's New Graphics Cards Make 'Meaningful Improvement' But Cost More Than Expected

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Analyst: AMD's New Graphics Cards Make 'Meaningful Improvement' But Cost More Than Expected

Advanced Micro Devices, Inc. (NASDAQ:AMD)’s new Radeon RX 5700 family of graphics cards show “meaningful improvement” over previous generation cards, though they’re more expensive than anticipated, said Morgan Stanley as AMD rolled out the cards at the E3 trade show.

The Analyst

Morgan Stanley analyst Joseph Moore has an Equal-Weight rating on AMD after an upgrade last week, with a $28 price target.

The Thesis

AMD released more information on the “RDNA” family of cards, the $379 Navi-based Radeon RX 5700 and $449 5700 XT.

Moore said Morgan Stanley expects AMD’s graphics business to improve, and he’s becoming less cautious on the stock. Still, full-year 2018 estimates might continue to be be too high in graphics, he wrote in a note.

Moore said the cards are priced higher than expected – and higher than customers at the Computex2 show two weeks ago expected, leaving competitor Nvidia Corporation (NASDAQ:NVDA) with a card that’s only slightly more expensive but with ray tracing features Moore said would get more support over the life of the card.

Price Action

AMD shares were down 2.6 percent to $32.35 at time of publication Tuesday.

Related Links:

Analyst: Inclusion In New Gaming Console A Positive For AMD

Rosenblatt: AMD Will Be 'Much Bigger Player In High-End GPU Gaming'

Latest Ratings for AMD

DateFirmActionFromTo
Jun 2019UpgradesUnderweightEqual-Weight
May 2019MaintainsHoldHold
May 2019MaintainsBuyBuy

View More Analyst Ratings for AMD
View the Latest Analyst Ratings

Posted-In: E3 Joseph Moore Morgan Stanley semiconductorsAnalyst Color Analyst Ratings Tech Best of Benzinga

 

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