AMD Price Target Hike
On Tuesday, Piper Sandler raised their price target for AMD (Advanced Micro Devices) from $82 to $100, while reiterating their Overweight rating. So why raise the price target on AMD stock here?
The analysts believe AMD could see significant upside based on AMD’s new chips such as the new Milan server CPU set to be released later this year, 2020. The Milan server is expected to increase computer performance, with Piper Sandler noting the new server will utilize 7nm technology which AMD has already mastered. This will significantly support manufacturing efforts and should help AMD’s total revenue grow at a faster than expected rate. Piper Sandler also noted the issues facing major competitors of AMD, including INTEL (INTC) as a reason for the price hike.
Over at ActionAlertsPlus.com, Jim Cramer and his team agreed with Piper’s sentiment on AMD’s future and also Intel’s woes. The team noted the stock’s 50% rise since July and also stated that “a stronger than expected quarter and guide, and perhaps most importantly, blunders at Intel (INTC) (that) will allow AMD to aggressively increase its market share”
AMD recently announced revenue for the second quarter of 2020 of $1.93 billion, which showed year-over-year increase of 26%. Some of the news that highlighted the quarter included the partnership with Apple, that features the AMD Radeon Pro 5600M mobile GPU. This will support the hardcore gamers like myself looking to bring that Call Of Duty:War Zone desktop gaming experience to mobile platforms. AMD also now powers Enterprise notebooks with the AMD Ryzen PRO 4000 Series, through a partnership with Lenovo and HP.
Looking ahead, AMD now expects 2020 revenue to grow by approximately 32 percent. The growth is expected to be heavily driven by gaming and data center products. The stock is currently trading around $83.00 (at the time of this writing), up ~110% year-to-date. I stand with Piper Sandler and will remain a buyer at these current levels.
Disclosure: At the time of publication, I am long Advanced Micro Devices (AMD). I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for creating this article (other than from TheStreet) and have no business relationship with any company whose stock is mentioned in this article.