Advanced Micro Devices, Inc. (NASDAQ:AMD) continues to enjoy a "reemergence" in the CPU market and to a lesser extent GPUs and the momentum can be sustained over the coming years, according to Wedbush.

The Analyst

Wedbush's Matthew Bryson initiated coverage of AMD with an Outperform rating and $35 price target.

The Thesis

Bryson said the bullish case for AMD's stock is based on four positive readouts which outweigh the negative attributes:

1. AMD's improving position in CPUs could be leveraged to gain share in the server market when the company releases its Rome parts.
2. AMD's production shifts to Taiwan Semiconductor in 2018, which creates a "better path" towards next-generation components made possible on advanced nodes.
3. The GPU market is likely to benefit from gaming as AMD's console and cloud socket makes it "more certain" AMD will participate in the growth.
4. AMD continues to be a primary beneficiary from Intel Corporation (NASDAQ:INTC), which Bryson said continues to experience multiple struggles on several fronts.

A few items to dislike include difficulty in determining the real demand for GPUs after the cryptocurrency collapse in 2018, difficulties in modeling peak market share levels and Intel poaching multiple senior AMD executives, which could give it an upper hand over time.

Wedbush gave Intel an Underperform rating and a $37.50 price target.

Price Action

Shares of AMD traded higher by 1.2% to $30.28 in Thursday's pre-market session.

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