A Report Card On AMD EPYC Processors From Baird

Advanced Micro Devices, Inc. AMD stock traded higher Monday morning after a pair of Wall Street analysts gave positive commentary on the company’s pricing power and the performance of its newest generation of chips.

The Analyst

Baird analyst Tristan Gerra reiterated an Outperform rating on AMD with a $20 price target.

The Thesis

On the same day Bank of America Merrill Lynch said AMD is closing its pricing gap with Intel Corporation INTC, Gerra said AMD’s EPYC chips are getting rave reviews. After Baird’s latest round of channel checks, Gerra said EPYC is still on track to start gaining momentum and market share in the second half of 2018.

Firmware issues have been resolved, and investors should expect U.S. hyperscale engagement announcements in 2019, the analyst said. 

The second-generation 7nm-based EPYC chips are expected to roll out starting in July, and Gerra said the launch will mark the first time AMD will be slightly ahead of the competition on a major introduction. 

“[The] combination of the right architecture and leading process node represents a paradigm shift for AMD and has significant, medium-term positive implications for market share, in our view." 

Recent comparisons between the Ryzen 7 and Intel’s Coffee Lake Core i7 give AMD the slight performance edge, Gerra said. While the 12nm Ryzen chips currently match the performance of the 14nm++ Coffee Lake chips, Gerra said Intel may not have an immediate 10nm answer for AMD’s 7nm chips.

Price Action

AMD stock is now up 45.3 percent year-to-date.

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