Morgan Stanley analyst Joseph Moore reinstated Advanced Micro Devices, Inc AMD with an Overweight and a $103 price target 23% upside).
AMD continues to execute its product roadmap while Intel Corp INTC attempts to regain its footing and deliver the long-awaited server product.
Moore sees further share gains for AMD in notebook and server processors in 2022 and 2023, offsetting industry-wide PC weakness and a likely gaming correction in 2023.
He noted AMD remains in a gaining position over the next couple of years, with the company likely to continue to win a share in cloud servers as supply constraints ease.
Moore's market view for semiconductors is cautious, particularly for 2023. Still, after the recent selloff, AMD offers potential for solid numbers at a reasonable valuation, with probably the best chance in his coverage of achieving consensus numbers in 2022 and 2023.
While a digestion phase in PCs and consoles appears likely, Moore budgeted for some caution next year; he believes the strength in the server (with further market share gains) should allow the company to keep posting solid growth at a now-reasonable valuation.
The price target reflects further share gains at the expense of Intel and 11% y/y growth in 2023 in line with the other high-growth semis names but a discount on the multiple.
Mizuho recently shared similar thoughts on AMD. Citi expected a contraction in the PC market to impact AMD negatively.
Price Action: AMD shares traded lower by 0.93% at $83.01 in the premarket on the last check Wednesday.
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