Advanced Micro Devices, Inc. AMD shares offer the potential for about 15% upside from current levels, according to an analyst at Piper Sandler.
The AMD Analysts: Analyst Harsh Kumar reiterated an Overweight rating on AMD shares and increased the price target from $110 to $120.
The AMD Thesis: AMD has the ability to procure additional supply in the back half of 2021 and all of 2022 to support strong growth, analyst Kumar said in a note.
Taiwan Semiconductor Manufacturing Co. Ltd. TSM has been a good partner, and given AMD's size, it is often moved to the front of the line when additional supply becomes available, the analyst said, citing the company.
AMD is "very well positioned" as enterprise spending returns, given its traction in both the PC and server markets, the analyst said.
Specifically, the analyst sees enterprise PC growth as a tailwind, regardless of the consumer segment.
The Xilinx, Inc. XLNX acquisition, the analyst said, remains on track to close by year-end. The analyst is cautious about the size of the accretion given the rapid organic growth of AMD since the deal was announced.
"Overall, we expect AMD to continue to take share in the server and enterprise PC markets, as it continues to introduce new products and generate design wins," Piper Sandler said.
"In our view, AMD is looking very solid into year-end," the firm added.
AMD Price Action: AMD shares were up 1.87% at $106.31 Thursday afternoon.
Photo: Courtesy AMD
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