Stifel Raises AMD Price Target After Cisco Unveils EPYC-Powered Servers

Cisco Systems, Inc. CSCO has unveiled a new line of Advanced Micro Devices, Inc. AMD EPYC-powered servers, and one Wall Street analyst said Cisco’s new servers are just one of many reasons to like AMD stock.

The Analyst

Stifel analyst Kevin Cassidy reiterated a Buy rating on AMD and raised the price target from $14 to $17.

The Thesis

AMD and Cisco announced a server platform powered by EPYC 7000 series processors. The Cisco platform should be available in the second half of 2018, and Cassidy said investors should expect more manufacturers to announce EPYC integration as the advantages of the server CPU become clearer.

AMD’s EPYC processor will start to gain market traction in the second half of 2018, giving AMD mid-single digit market share, up from less than 1 percent in the same period last year, the analyst said.

AMD should have no problem hitting its product launch targets, which will serve to build customer confidence, Cassidy said. End demand for PCs, servers and add-in-cards is on the upswing, he said.

“Consistent with our April 4 AMD upgrade thesis, we believe AMD's EPYC server CPU is winning server designs and AMD's broader PC CPU offering will allow AMD to outperform the market."

The PC market seems to have stabilized for now, and Cassidy said he expects several Ryzen-based PCs to be unveiled at the Computex event from June 5-9.