Advanced Micro Devices' Price Target Raised To 2007 Level At Canaccord

Shares of Advanced Micro Devices, Inc. AMD have gained almost 300 percent year-to-date and have appreciated almost 60 percent since November 14. Citing “the significant move in the stock price in the last several weeks driven by valuation expansion,” Canaccord Genuity’s Matthew D. Ramsay raised the price target from $8.75 to $13.

Advanced Micro Devices provided more details of its GPU server acceleration strategy, including the new Radeon Instinct products, and released impressive performance targets for Ryzen.

Ramsay reiterated a Buy rating on Advanced Micro Devices, saying confidence had risen in the company’s CPU and GPU roadmaps, in gross margin expansion, and in “both 14nm yields and the 7nm process roadmaps at key foundry partners.”

Several Catalysts Yet To Come

Despite the surge in Advanced Micro Devices’ share price, the Buy thesis comes amid several catalysts yet to come, Ramsay commented. He enumerated the following reasons for the confidence:

1. The company would likely reemerge as "a competitive second source” to Intel Corporation INTC with an on-track Zen roadmap across relevant x86 CPU markets.
2. Gradual unit share recovery in lower GPU market tiers with Polaris would likely be supplemented by the Vega launch in discrete GPUs with ASPs trending higher for both Advanced Micro Devices and NVIDIA Corporation NVDA, which is the market leader.
3. Gaming console revenue should revamp, backed by stronger ASPs given Advanced Micro Devices “unique position” with key partners Microsoft Corporation MSFT and Sony Corp (ADR) SNE with 4K/VR gaming increasing console hardware refresh rates.

At last check, shares of Advanced Micro Devices were down 0.57 percent at $10.48.