AMD Stock Upgraded to Strong Buy at Raymond James on ‘Highly Attractive’ Valuation, Analyst Sees Over 80% Upside
2022.04.25 14:07
AMD (AMD) Stock Upgraded to Strong Buy at Raymond James on ‘Highly Attractive’ Valuation, Analyst Sees Over 80% Upside
Raymond James analyst Chris Caso upgraded Advanced Micro Devices Inc (NASDAQ:AMD) stock to Strong Buy from Outperform with a $160.00 per share price target.
The analyst sees a “highly attractive valuation” with AMD shares being down over 40% YTD. AMD stock price is trading at the lowest level seen in the last 9 months.
“As we have become more concerned about cycle risks given potential for slowing consumer demand and elevated inventory levels at customers, we favor those semi companies with strong secular drivers, more muted cyclical exposure and attractive valuations, for which AMD appears well positioned. We have strong confidence regarding AMD’s position and share gains in the datacenter market,” Caso said in a client note.
On the fundamental side, the analyst expects to see AMD continuing to gain market share from Intel (NASDAQ:INTC) as the roadmap of the latter is “not showing parity with AMD until at least the end of 2024.” In the data center sector particularly, market shares for AMD are “inevitable.”
In order to ensure supply, customers are committing to AMD, Caso added. The analyst also added that the technology gap between AMD and INTC widens when Genoa comes out in 4Q21.
As far as risks are concerned, PC remains the main area of concern.
“We’re also concerned about the sustainability of XLNX revenue after what appears to be ~35% Y/Y growth for C22. But we do expect XLNX to be mildly accretive, and we note that just 1% of client share gain would offset a 5% decline in the overall market, demonstrating that share is a much more important lever for AMD than market growth.”
AMD stock price is up 0.7% in pre-open Monday.
By Senad Karaahmetovic
