In today's video, I discuss recent updates impacting top semiconductor companies Nvidia (NASDAQ: NVDA), Intel (NASDAQ: INTC), and Advanced Micro Devices (NASDAQ: AMD). Check out the short video to learn more, consider subscribing, and click the special offer link below.
Chip makers continue to face headwinds in certain end markets, mainly the PC market. Nonetheless, investors are upbeat about several chip stocks due to the demand induced by the growing interest in generative
artificial intelligence (AI) applications. We used
TipRanks’ Stock Comparison Tool to place Intel (
NASDAQ:INTC
), Advanced Micro Devices (
NASDAQ:AMD
), and Qualcomm (
NASDAQ:QCOM
) against each other to find the most attractive
chip stock as per Wall Street analysts.
Intel (NASDAQ:INTC)
Chip giant Intel impressed investors last month with its
better-than-anticipated Q2 2023 results and third-quarter outlook. The company’s
Q2 2023 revenue fell 15% year-over-year to $12.9 billion. Despite a continued decline in revenue, the company returned to GAAP profitability after two consecutive quarters of losses.
Intel’s cost reduction efforts helped it improve its Q2 2023 bottom line. The company expects to generate $3 billion in cost savings this year.
While Intel said that cloud companies are focusing more on getting graphics processors for their AI applications instead of Intel’s central processors, it is confident that in the longer term AI will expand the total addressable market for its server CPUs.
What is the Target Price for Intel Stock?
On July 28,
Truist Financial analyst William Stein increased his price target for Intel to $37 from $32 and reiterated a Hold rating on the stock. The analyst noted that the company reported its second consecutive "good quarter" with its commentary around manufacturing process improvements, new products, and cost-cutting all seen as constructive.
Nonetheless, Stein cautioned that two quarters are still a "fragile trend," and he sees the company’s total addressable market for the company’s X86 to remain challenged over the long term.
Wall Street is sidelined on INTC, with a Hold consensus rating based on five Buys, 19 Holds, and six Sells. The average price target of $36.07 implies 2.7% upside.
Shares have risen 33% so far in 2023.
Advanced Micro Devices (NASDAQ:AMD)
Advanced Micro Devices’
Q2 2023 results beat analysts’ estimates, even as
revenue declined 18% due to persistent weakness in the PC market. Revenue from the data center segment declined 11% year-over-year but was up 2% sequentially. The growth compared to the first quarter was a result of the accelerated adoption of Intel 4th Gen EPYC CPU, with revenue nearly doubling sequentially due to robust demand in the cloud market.
During the
Q2 earnings call,
AMD CEO Lisa Su said that 30 new AMD instances were launched in the cloud in the second quarter, with multiple Genoa processor instances announced by Amazon’s (
NASDAQ:AMZN
) Amazon Web Services, Alibaba (
NYSE:BABA
), Microsoft (
NASDAQ:MSFT
), and Oracle (
NYSE:ORCL
). Overall, the company expects its EPYC revenue to grow by a double-digit percentage sequentially in Q3 2023, driven by the robust demand for the 4th Gen EPYC CPU.
While AMD’s Q3 2023 revenue guidance fell short of expectations, it remains confident about the road ahead. With regard to the opportunities in generative AI, the company said that customer interest in its MI300A and MI300X GPUs is very high. AMD sees a multibillion-dollar growth opportunity in AI across cloud, edge, and other endpoints. For instance, in the data center space alone, AMD expects the market for AI accelerators to reach over $150 billion by 2027.
Is AMD a Buy, Sell, or Hold?
Following the Q2 print,
Citigroup analyst Christopher Danely upgraded his rating on AMD to Buy from Hold on August 2 and increased the price target to $136 from $120.
Danely had earlier thought that AMD’s AI products would be margin dilutive and investors would be concerned about the stock’s expensive valuation. However, the analyst admitted that he was “wrong on both counts."
Wall Street’s Strong Buy consensus rating on
AMD stock is based on 25 Buys and six Holds. The average price target of $142.38 implies nearly 23% upside.
Shares have rallied 79% year-to-date.
Qualcomm (NASDAQ:QCOM)
Qualcomm’s fiscal
third-quarter earnings surpassed the Street’s expectations, but Q3 revenue and a weak outlook for the fiscal fourth quarter disappointed investors. The company’s high exposure to the slumping handset market adversely impacted its
Q3 FY23 revenue, which declined 23% year-over-year to $8.5 billion.
Moreover, Qualcomm expects Q4 FY23 revenue in the range of $8.1 billion to $8.9 billion, reflecting a year-over-year decline in the range of about 22% to 29% due to macroeconomic pressures, weak mobile devices market, and channel inventory drawdown.
Looking ahead, the company believes that it is uniquely positioned to capitalize on the upcoming on-device Gen AI opportunity. The company claims that its AI technology is highly differentiated, backed by high-performance, low-power heterogeneous computing across its central processing unit (CPU), graphics processing unit (GPU), and neural processing unit (NPU) offerings.
What is the Forecast for Qualcomm Stock?
On August 3,
Deutsche Bank analyst Ross Seymore downgraded Qualcomm from Buy to Hold and lowered the price target to $120 from $130. The analyst contended that the continued headwinds that the company is facing in the Handset segment raise concerns that the issues are not just cyclical but structural as well.
In contrast,
Piper Sandler analyst Harsh Kumar reiterated a Buy rating on QCOM and said that the company does not seem to be losing market share but is just stuck in a tough handset market.
With 13 Buys and five Holds, Wall Street has a Moderate Buy consensus rating on Qualcomm. The average price target of $136.75 implies 12.6% upside.
Shares have risen 10.5% so far in 2023.
Conclusion
Wall Street is highly bullish on Advanced Micro Devices and sees higher upside potential in the stock compared to Intel and Qualcomm. Aside from analysts, hedge funds are also optimistic about the stock and increased their holdings in AMD by 430,000 shares last quarter. As per TipRanks’ Hedge Fund Trading Activity Tool,
the Hedge Fund Confidence Signal is Positive on AMD.
Disclosure
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Apple (
NASDAQ:AAPL
), Amazon (
NASDAQ:AMZN
), and Advanced Micro Devices (
NASDAQ:AMD
) are among the widely discussed stocks on the social media platform Reddit. While these
top technology stocks are buzzing on Reddit and have significantly gained mentions, they have appreciated quite a lot on a year-to-date basis. Despite the rally in their prices, analysts’ average price targets indicate further upside in these stocks.
Against this backdrop, let’s delve into these trending Reddit stocks.
Can Apple's Stock Keep Going Up?
Apple stock has gained about 47.56% year-to-date. However, its stock is down over 2% in after-hours trading following its
third-quarter financial results. Though its
earnings came ahead of the Street’s projection, the decline in sales of the iPhone, iPad, and Mac didn’t go well with investors.
The decline in sales reflects tough year-over-year comparisons and macro uncertainty. Nonetheless, its Services revenue reached $21.2 billion, driven by more than one billion paid subscriptions.
Following Q3 earnings,
Goldman Sachs analyst Mike Ng reiterated a Buy recommendation on Apple stock on August 3. The analyst said that “certain elements of F3Q23 results were disappointing vs. Consensus.” Nevertheless, the company’s growing installed base of paid subscriptions will drive “secular growth in Services” and support its premium valuation.
Overall,
Apple stock has received 24 Buy and seven Hold recommendations for a Strong Buy consensus rating. Analysts’ average price target of $203.64 implies 6.52% upside potential from current levels.
Is Amazon Stock Expected to Rise?
Amazon stock has gained over 53% year-to-date. Further, the stock is up about 8.73% in after-hours trading following its
solid second-quarter results. AMZN
Q2 earnings crushed Wall Street’s estimates. Meanwhile, analysts’ average price target indicates that Amazon stock could rise more.
The increase in the e-commerce business, led by macro improvement and cost reduction measures, supported AMZN’s Q2 performance. Moreover, signs of stabilization in the cloud business (AWS) and ongoing momentum in its advertising segment position it well to deliver solid growth in the coming quarters.
Eric Sheridan of Goldman Sachs maintained his bullish view of Amazon stock following Q2 earnings results. The analyst expects the company to benefit from improving margins in the e-commerce business. Further, the ongoing digital transformation will support its AWS segment. At the same time, Amazon will also benefit from the growing scale of its advertising business.
Along with Sheridan,
Jefferies analyst Brent Thill,
Bernstein analyst Mark Shmulik, and
Nicholas Jones of JMP Securities reiterated the Buy rating on AMZN stock following Q2 financial results.
Amazon stock has received a Buy recommendation from all 29 analysts who have recently rated it. Collectively, their 12-month average price target of $86.20 implies an upside of nearly 16%.
What is the Future of AMD Stock?
Shares of Advanced Micro Devices will likely benefit from the solid demand for chips that power
AI (Artificial Intelligence) applications. At the same time, the recovery in PC demand will
support its financials, in turn, its stock.
AMD recently delivered
better-than-expected earnings. The company’s management expects the PC market to grow in the second half of 2023, which is encouraging. Additionally, the growing AI deployments in the data center market augur well for growth.
As AI presents a multibillion-dollar growth opportunity for the company,
Tristan Gerra of Robert W. Baird reiterated a Buy on AMD stock on August 1. The analyst expects AMD’s gross margins to expand significantly in 2024, led by “the ramp of AI” and easier year-over-year comparisons in the Embedded segment (which includes embedded CPUs and GPUs).
Overall,
AMD stock has a Strong Buy consensus rating on TipRanks, reflecting 25 Buy and six Hold recommendations. Analysts’ average price target of $142.51 implies 25.95% upside potential.
The Bottom Line
AAPL, AMZN, and AMD stocks are trending on Reddit and have multiple growth engines to drive their stock prices higher. In addition, analysts’ Strong Buy consensus rating supports the bull case. As these stocks appear to be attractive long-term bets, Wall Street analysts’ average price targets show that AMD offers the highest upside potential.
Disclosure
What happened
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