What AMD's Q4 Means For The Semi Space

Advanced Micro Devices, Inc. AMD reported fourth-quarter results after Tuesday's market close, which initially sent shares lower by 7 percent before the stock fully erased all of its losses. Investors will be closely looking at AMD's results to gauge the overall semiconductor space.

The Analyst

B Riley FBR's Craig Ellis doesn't rate AMD's stock but maintains a Buy rating on Intel Corporation INTC's stock with an unchanged $55 price target and a Buy rating and $270 price target on NVIDIA Corporation NVDA's stock.

The Thesis

AMD's earnings report read-through for Intel should be seen as "more positive than negative," Ellis said in a Wednesday note. (See the analyst's track record here.) 

AMD is gaining some traction in its PC and server products, but excluding the strength from cryptocurrency, AMD's notebook and/or server MPU share inroads are "modest," the analyst said.

As Intel introduces its 10nm PC products later on in 2018, its competitiveness "should jump higher" versus AMD, Ellis said. 

Moving on to Nvidia, AMD's Gaming's performance bodes well for Nvidia's upcoming report, which could see "material upside" to Ellis' $1.616-billion revenue estimate, he said.

Similarly, AMD's strong performance in the data center segment bodes well for Nvidia's data center business, which could report upside to current estimates of $541 million in the fourth quarter, Ellis said. 

Price Action

Shares of AMD were trading higher by 3.3 percent early Wednesday morning.

Shares of Intel were trading higher by 0.8 percent early Wednesday morning.

Shares of Nvidia were trading higher by 1.3 percent early Wednesday morning.

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