Barclays: The Market Believes AMD Is Gaining On Intel

Barclays raised its price target on Advanced Micro Devices, Inc. AMD Monday while simultaneously downgrading competitor ;Intel Corp. INTC from Overweight to Equal Weight.

The Analyst 

Analyst Blayne Curtis maintained an Underweight rating on AMD and lifted the price target from $9 to $15.

The Thesis

Barclays has made no material changes to its AMD estimates, but its stance now reflects a wider range of possible outcomes, Curtis said in the Monday note. (See the analyst's track record here.)

“We do want to be clear that we still have not seen any evidence (actual ODM forecasts vs. public cloud and OEM announcements) to support these more bullish levels, but clearly the market is much more optimistic on the growth prospects as reflected in the stock’s appreciation,” the analyst said.

The discussion on AMD surrounds server technology and its leadership within the industry, Curtis said.

“Intel currently has a 15-20-percent core performance advantage at 14nm and there are other ways to boost performance through process/materials, architectural and software/firmware, but the face of the matter is that a shrink to 7nm from 14nm does provide 40-percent better performance or 60-percent better power, and Intel needs to fill in the blanks why they feel they can maintain performance leadership."

Price Action

AMD shares were down 0.30 percent at $18.49 at time of publication Monday.

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