Rosenblatt Says AMD Now Has A Path To $30 Per Share

Rosenblatt Securities turned incrementally bullish on Advanced Micro Devices, Inc. AMD after meeting with CFO Devinder Kumar and IR Corporate VP Laura Graves.

The Analyst

Rosenblatt's Hans Mosesmann maintained a Buy rating on Advanced Micro Devices with a price target lifted from $27 to $30.

The Thesis

AMD CEO Lisa Su's "understated and strong leadership" is resonating well with investors, Mosesmann said in the note. (See his track record here.)

The chipmaker's momentum can be attributed to a strategic decision in 2012 to enact a multiyear, high-performance compute roadmap, the analyst said. Within the next year or so, the company is targeting 10-percent server market share driven by EPYC 14 nanometer and 7 nanometer technology, he said. 

AMD is focusing more on performance in the server market instead of conventional wisdom that calls for lower prices, Mosesmann said. 

The environment for AMD is "quite fertile" in terms of unit share this cycle, with a top-to-bottom portfolio and rival Intel Corporation INTC showing a "busted" process roadmap, the analyst said. 

AMD's total addressable market opportunity over the next few years is around $75 billion, with the biggest opportunities in data center CPU and GPU, according to Rosenblatt.

Mosesmann said the company boasts a multiyear advantage versus Intel in CPUs, with 7-nanometer tech and at least a six-month advantage over rivals. AMD is poised to maintain its prime positioning in video gaming consoles given the x86 legacy requirement and its GPU roadmap, he said. 

AMD isn't seeing a security flaw impacting EPYC processors, Mosesmann said. The company is also benefiting from an influx of engineering and management candidates due to external factors that include consolidation elsewhere in Silicon Valley and "disarray" at other companies, the analyst said. 

Price Action

Advanced Micro Devices shares hit a new 52-week high of $21.94 Thursday morning and were trading up 3.83 percent at $21.70 at the time of publication. 

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