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Piper Jaffray: AMD 'More Or Less Fully Valued'

August 19, 2019 2:45 pm
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Piper Jaffray: AMD 'More Or Less Fully Valued'

Advanced Micro Devices, Inc. (NASDAQ:AMD) has an “exciting” product portfolio, but the recent rise in the semiconductor company’s share price is keeping Piper Jaffray on the sidelines.

The Analyst

Harsh Kumar started coverage of Advanced Micro Devices with a Neutral rating and $33 price target.

The Thesis

Piper Jaffray views the company’s product positioning and financial leverage favorably, citing a “steady cadence of innovative products” in long-term growth markets like data centers and gaming, Kumar said in the Monday initiation note. (See his track record here.)

“As the company releases these innovative products, it should drive gross margin leverage and provide operating leverage as revenue growth outpaces operating expense growth,” the analyst said. 

But the shares are trading up 69% year-to-date, with the semiconductor sector index up less than 30% over the same period. And semiconductor companies may be vulnerable to China trade tensions, he said. 

"Given the stock’s recent appreciation … and the current macro/ geopolitical environment, we see the stock as more or less fully valued."

Price Action

AMD shares were trading up 1.54% at $31.66 at the time of publication Monday. 

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