For the second day in a row, a major Wall Street firm has reiterated a bullish outlook and raised its price target for Advanced Micro Devices, Inc. AMD.
The Analyst
Jefferies analyst Mark Lipacis reiterated a Buy rating on AMD and raised the price target for the stock from $30 to $36.
The Thesis
A day after Stifel raised its price target for AMD by 80 percent, Lipacis echoed the argument that AMD has a major window of opportunity in the near-term thanks to missteps by rival Intel Corporation INTC. (See the analyst's track record here.)
A new report from Fubon Research suggests Intel will not be able to fully supply the high-end PC MPU market through at least the second quarter of 2019, and Lipacis said Intel’s loss is AMD’s gain.
Beyond the market share opportunity, the analyst said Intel’s struggles also help AMD’s fundamentals as well.
“The best scenario for AMD is when Intel is capacity-constrained — not only does AMD benefit from share gains, but also from benign pricing which leads to higher margins."
In the longer-term, Lipacis said it’s encouraging that Intel seems to be gaining a foothold in the high-end commercial desktop and server markets, a sign that its strategy to focus more on performance than price is paying off.
AMD’s share of the server, desktop and notebook markets could grow from 10 percent to as high as 30 percent in 2019, the analyst said.
Price Action
AMD stock was higher by 1.76 percent at the time of publication Friday following the positive commentary and is now up 205.9 percent year-to-date.
Related Links:
Stifel Raises AMD Price Target By 80%
Still-Bullish Morgan Stanley Tamps Down Expectations For Nvidia's Turing GPUs
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