“The 2020 server market could be stronger than current muted consensus,” wrote analyst Vijay Rakesh. The analyst sees the server market growing 7% year over year in 2020 compared to last year’s decline of 7%; current consensus estimates are calling for 5% year-over-year growth in the server market, according to Rakesh.
He also noted that AMD could gain server market share in the second half of 2020 as many of the aggressive price cuts by rival Intel (INTC) - Get Report pass into the rear-view mirror and Mizuho channel checks indicate potential delays in Intel’s 10-nanometer Ice Lake single socket server products. Finally, Rakesh wrote that the PC market in the first half of 2020 could be better than expected with a new Sony (SNE) - Get Report Playstation 5 AMD gaming console cycle starting in the second half of the year.
Rakesh, who had been neutral on AMD for the past six months and admitted that he missed AMD's big fourth quarter run, raised his price target 45% from $38 to $55. AMD shares were up 3.7% to $49.56 in early afternoon trading on Thursday.
AMD was the top-performing stock in the S&P 500 last year with a gain of 148%, and was one of TheStreet’s top stocks of 2019.