) on Monday to Strong Buy from Outperform, boosting the shares by 3.2% to $91.01.
“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,” Caso wrote in a research note.
The analyst believes AMD could continue gaining market share in its datacenter segment, both in cloud and enterprise. The upcoming release of the company’s new Genoa server chip could put AMD ahead of competitors such as
Personal computer sales remain Caso’s main area of concern, as consumer demand shows signs of slowing. But even then, he is optimistic that AMD will wrestle customers away from Intel in the PC market as it moves to become a “sustained duopoly over time,” Caso wrote. Just a 1% of client share gain would offset a 5% decline in the overall market, making market share a more important lever for the company than market growth, he calculated.
“Our recent checks indicate that demand from AMD remains solid,” he wrote.
Caso maintained a $160 price target on AMD. Earlier this month, Truist analyst William Stein cut his target for the stock to $111 from $144, citing concerns over lagging demand for semiconductor chips in the compute, consumer, and communications segments.
AMD is down 37% this year. The stock retrenchment has made the company’s valuation “highly attractive for a company with such strong secular growth prospects,” Caso wrote.
Overall, analysts remain positive on the stock. Of the 39 analysts polled by FactSet, 62% rated it a Buy or Overweight, while 36% rated it a buy and 2.6% a Sell.
AMD Could Overcome Slowing Demand for Semis. It’s a Strong Buy, Analyst Says.
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Dreamstime
Advanced Micro Devices
could be well-positioned to ride out a tough cycle for semiconductor stocks amid slowing consumer demand, according to Raymond James.
Analyst Chris Caso upgraded Advanced Micro Devices (ticker:
AMD
) on Monday to Strong Buy from Outperform, boosting the shares by 3.2% to $91.01.
“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,” Caso wrote in a research note.
The analyst believes AMD could continue gaining market share in its datacenter segment, both in cloud and enterprise. The upcoming release of the company’s new Genoa server chip could put AMD ahead of competitors such as
Intel
(INTC) and
Taiwan Semiconductor
(TSM), he added.
Personal computer sales remain Caso’s main area of concern, as consumer demand shows signs of slowing. But even then, he is optimistic that AMD will wrestle customers away from Intel in the PC market as it moves to become a “sustained duopoly over time,” Caso wrote. Just a 1% of client share gain would offset a 5% decline in the overall market, making market share a more important lever for the company than market growth, he calculated.
“Our recent checks indicate that demand from AMD remains solid,” he wrote.
Caso maintained a $160 price target on AMD. Earlier this month, Truist analyst William Stein cut his target for the stock to $111 from $144, citing concerns over lagging demand for semiconductor chips in the compute, consumer, and communications segments.
AMD is down 37% this year. The stock retrenchment has made the company’s valuation “highly attractive for a company with such strong secular growth prospects,” Caso wrote.
Overall, analysts remain positive on the stock. Of the 39 analysts polled by FactSet, 62% rated it a Buy or Overweight, while 36% rated it a buy and 2.6% a Sell.
Write to Sabrina Escobar at [email protected]
Source: https://www.barrons.com/articles/advanced-micro-devices-amd-stock-strong-buy-51650895737?siteid=yhoof2&yptr=yahoo