“AMD reported another solid quarter, with Q3 sales of $3.3 billion, up 54% year-over-year and 5% ahead of” the consensus forecast, Bank of America analyst Vivek Arya wrote in a commentary.
AMD on Wednesday closed at $122.28, down 0.5%, and soared 37% in the past three months amid the global chip shortage.
“And INTC pricing flexibility could be limited, given cash flow required to fund its capex and dividend.” For AMD, “closing its announced M&A by year-end could be the next stock catalyst,” Arya said.
Arya lifted his price target to $150 from $135, maintaining his buy rating.
Jefferies analyst Mark Lipacis raised his price target to $145 from $127, keeping his buy rating.
“We estimate AMD gained 280 basis points of server-central-processing-unit-revenue share in the third quarter,” he wrote. “And we have higher conviction in our thesis that AMD's server share gains accelerate to 200 to 300 basis points per quarter from 50 to 100 points.
“We conservatively model another 200 basis-point [increase in gross margins] by the end of 2022,” Lipacis said. “We believe AMD’s next generation server (Zen-4) extends its lead and think its Nov.8 Data Center event will be a catalyst.”