Nasdaq AMD

Over the last half decade or so, hardly any stocks have outperformed the market to the extent Advanced Micro Devices (AMD) has. The huge market gains have been a reflection of the company’s real-world performance, which has seen the chipmaker considerably close the gap on its traditionally much bigger rival Intel (INTC).

Apart from offering superior products, AMD has made the most of Intel’s production delays to eat away at its CPU dominance. However, 2021 is shaping up to be a different year to recent ones. Intel has been taking meaningful steps to turn its business around, and only recently appointed a new CEO, and one with proper pedigree at that.

Deutsche Bank analyst Ross Seymore notes how the new figure at the rival’s helm, could impact AMD’s forward charge.

“While we expect AMD to continue to execute on its new product ramps, and any changes to INTC’s manufacturing strategy will not impact competitive intensity for at least 2-3 years, we do expect this topic to increasingly weigh on the LT AMD thesis,” the 5-star analyst noted. “Consequently, despite increasing our revenue estimates in the near term (higher semi-custom + PC CPU revenue, with EPS slightly falling due to a higher tax rate in 2021), we expect the increased uncertainty around competitive intensity to weigh on AMD’s already premium valuation.”

While Seymore tempers expectations of future performance, he expects AMD to beat the estimates when the company reports 4Q20 earnings early next month (Feb 2.).

Seymore expects AMD to deliver revenue of $3.06 billion, a 9% quarter-over-quarter uptick, near the high end of AMD’s guidance and above the $3.02 billion consensus estimate. While on the bottom line, Seymore anticipates EPS of $0.48, above his previous forecast of $0.47.

Looking further ahead, while Seymore says AMD might be at risk of losing market share to Intel over the long term, “given positive data points in the gaming ecosystem,” the analyst raised his 1Q21 revenue estimate from $2.76 billion to $2.84 billion (Street expects to $2.70 billion).

That said, for now, Seymore expects AMD shares to stay range bound. The analyst rates the stock a Hold, along with a $90 price target. (To watch Seymore’s track record, click here)

Where does the rest of the Street side on this chip player? AMD maintains a Moderate Buy from the analyst consensus, based on 23 recent ratings. These include 15 Buys, 6 Holds, and 2 Sells. Shares are trading at $89.45, and the $96.55 average price target suggests room for about 8% upside. (See AMD stock analysis on TipRanks)

To find good ideas for chip stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

Advanced Micro Devices (AMD) CEO Lisa Su has been given much of the credit for the company’s remarkable turnaround. From one teetering on the edge of bankruptcy in the early parts of the previous decade, Su has expertly steered the chipmaker to its current standing as a semiconductor giant.

Rosenblatt analyst Hans Mosesmann logged in to hear Su's virtual keynote at this year’s CES (consumer electronics show) and came away impressed.

“CEO Lisa Su’s virtual CES keynote was strong and hit all the key company market segments of console gaming, PC/gaming, servers, and workstations, and with guests from academia, Microsoft, HP, Lenovo, Lucasfilm, and others,” the 5-star analyst said. “Interestingly, and of note, Microsoft’s Chief Product Officer Panos Panay gushed unprompted about the great momentum AMD has in industry and, specifically, within Microsoft’s PC, Azure, and console areas.”

Product wise, Su announced a new generation of mobile processors - the Ryzen 5000 Zen 3 series. Targeting gaming laptops and light notebooks, the processors feature up to 8 cores and 16 threads, and will go toe to toe against Intel’s Tiger Lake.

AMD also introduced a new Ryzen 5000 HX brand for gaming notebooks that is “positioned with over 35% better performance than Intel (10th Gen Core i9 mobile processor), and over 13% advantage in single threaded workloads.”

The new Ryzen 5000 mobile series will launch in approximately 150 models this year, compared to the Ryzen 4000 mobile’s 100 models in 2020 and the 70 models introduced in 2019 for the Ryzen 3000 mobile.

“AMD will continue to gain share in 2021,” Mosesmann summed up, “In platforms that we see are higher volume and in segments that AMD has yet to properly penetrate.”

To this end, Mosesmann rates AMD a Buy along with a $120 price target. The implication for investors? Upside of 36%. (To watch Mosesmann’s track record, click here)

The rest of Wall Street largely buys into what this chip player has to offer. AMD's Moderate Buy consensus rating is based on 14 Buys, 5 Holds and 2 Sells. With a return potential of ~9%, the average price target stands at $95.83. (See AMD stock analysis on TipRanks)

To find good ideas for tech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.