Advanced Micro Devices, Inc. (NASDAQ: AMD) shares retreated on Wednesday despite the company’s strong quarterly report.
The AMD analysts: Rosenblatt Securities analyst Hans Mosesmann reiterated a buy rating on AMD, raising the price target from $ 120 to $ 135.
Aaron Rakers, an analyst at Wells Fargo Securities, maintained an overweight rating and price target of $ 120.
Weston Twigg, an analyst at KeyBanc Capital Markets, maintained a sector weight rating.
Rosenblatt says AMD can double in size: AMD said in a note that fourth-quarter sales were better than expected, thanks to overall customer demand for Ryzen CPUs, server EPYCC CPUs, customer / data center GPUs and game consoles.
The analysis said the better performance due to the better line.
The 44.8% gross margin played down Rosenblatt’s estimate slightly, he said.
A better than seasonal computer and console market and continued strength in the data center EPYC, Mosesmann said, drove the outlook for the first quarter.
“The new server EPYC3 Milan, which helped improve the power of Cloud / Enterprise through 4Q20 and 1Q21, gives AMD the best visibility in years with greater momentum in broader Cloud customers, workloads and Enterprise.”
Among the analysts’ main take-away from the call: AMD sees no digestion of the cloud stock, marked by Intel Corporation se (NASDAQ: INTC) for the first half of 2021.
Management also said that the operating business of EPYC strengthens as 4Q20 progresses, he added.
These factors suggest that Intel’s Ice Lake is not achieving the desired design, as the specifications of this product are becoming increasingly known to compensate for Milan’s momentum, Mosesmann said.
Given the secular opportunity and now $ 110 billion TAM, which the Xilinx, Inc. (NASDAQ: XLNX) acquisition, is the prospect for AMD to double in size over the next few years, according to Rosenblatt.
See more earnings on AMD
Related link: AMD Analyst Projects Strong start to 2021 for chipmaker
Wells Fargo’s positive AMD thesis intact: Well’s Fargo’s positive thesis remains intact after AMD’s solid quarterly results and first quarter and full year 2021 lead above consensus, Rakers said.
The EPYC CPU server processor’s revenue would amount to $ 535 million, representing a 65% growth, the analyst said.
The company said it experienced a dual increase in EPYC-based cloud cases in 2020, and also expressed confidence in further expansion with a full launch of 7 nm Zen 3 Milan EPYC CPUs in March, he said.
Looking ahead, AMD shares are likely to trade in response to expectations of the continued strength of computing demand and the acceleration of server CPU momentum, according to Wells Fargo.
Expanding the traction of AMD’s data center Instinct GPUs is likely an increasing growth / sentiment driver, Rakers said.
High valuation competition keeps KeyBanc outlined: AMD’s share profit story is intact, with strong momentum in the data center and an improved opportunity to expand its GPU share, Twigg said in a note.
To reflect the strong forecast, the analyst has raised the estimates for AMD.
Growth is likely to slow in 2022, as demand is likely to decline as the wind of the pandemic fades and the share price is likely to decline, he said.
“Expectations for AMD remain very high, and with compelling new products and an ambitious new CEO from rival Intel, the positive story about AMD may start to weaken, and it is upside down to its aggressive multiple (~ 45x our 2022 EPS). estimate), according to us, ‘Twigg said.
“While execution and demand are strong, our sector weight remains high due to high valuation and an increasingly competitive landscape.”
AMD price action: At the last close, AMD shares fell 3.98% to $ 90.94
Related link: AMD is expected to draw strength from Intel’s weaknesses, game console chips
Latest ratings for AMD
|
Date |
Company |
Action |
Of |
On |
|---|---|---|---|---|
|
Jan 2021 |
Mizuho |
Maintain |
Buy |
|
|
Jan 2021 |
Lus Hoofstad |
Maintain |
Buy |
|
|
Jan 2021 |
JP Morgan |
Maintain |
Neutral |
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