Over the past half decade, almost no stock has outperformed the Advanced Micro Devices market (AMD) has. The huge market gain was a reflection of the real performance of the company, which significantly reduced the chipmaker’s gap in its traditionally much larger competitor Intel (INTC).
In addition to offering superior products, AMD made the best use of Intel’s production delays to eat up CPU dominance. However, 2021 is a different year than the recent one. Intel has taken significant steps to turn its business around, and has just recently appointed a new CEO, and one with the right pedigree attached to it.
Ross Seymore, analyst at Deutsche Bank, notes that the new figure at the helm of rival could affect AMD’s prepayment.
“While we expect AMD to continue implementing its new product launches, and any changes to INTC’s manufacturing strategy for at least 2-3 years will not affect the competitive intensity, we expect this topic to increasingly increase the LT AMD thesis will weigh, “the 5-star analyst noted. Despite the increase in our short-term revenue estimates (higher semi-personal + computer CPU revenue, with a slight decrease in profit due to a higher tax rate in 2021), we expect the increased uncertainty surrounding competitive intensity will weigh on AMD’s already premium. valuation. ”
Although Seymore weakens expectations of future performance, he expects AMD to beat the estimates when the company reports 4Q20 earnings early next month (February 2).
Seymore expects AMD to generate revenue of $ 3.06 billion, an increase of 9% quarter-on-quarter, close to the highest point of AMD’s lead and above the consensus estimate of $ 3.02 billion. While at the bottom, Seymore expects a profit of $ 0.48, above its previous estimate of $ 0.47.
Looking further ahead, while Seymore says that AMD may run the risk of losing Intel in the long run, ‘given positive data points in the gaming ecosystem’, the analyst estimates its 1Q21 revenue estimate of $ 2.76 billion to $ 2.84 billion (Street expected) to $ 2.70 billion).
That said, for the time being, Seymore expects AMD shares to remain limited. The analyst rates the stock a Hold’s, along with a price target of $ 90. (To see Seymore’s record, click here)
Where is the rest of the street on this turntable? AMD maintains a moderate buy from the analyst’s consensus, based on 23 recent ratings. This includes 15 sales, 6 containers and 2 sales. Shares are trading at $ 89.45, and the average price target of $ 96.55 indicates room for about 8% upside. (See AMD stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are those of the proposed analyst. The content is for informational purposes only. It is very important to do your own analysis before investing.