By Wallace Witkowski, MarketWatch
Analysts see pace of AMD taking market share from Intel quickening
Advanced Micro Devices Inc.'s stock soared to fresh records Tuesday after another analyst hiked his price target on the chip company, driving it to a market cap just shy of $100 billion.
AMD (AMD) shares spent Tuesday carving out new intraday records, and closed up 9.5% at $85.04 for a new closing record and a market cap of $99.84 billion. The stock's intraday high of $85.81 put the company at a market cap of more than $100 billion for the first time, and a close of $85.18 would have put AMD just over the $100 billion mark. AMD's stock last closed at a record $78.20 on July 30, fresh from AMD's strong earnings and indications () that the company's market share gain from Intel Corp. (INTC) was quickening.
Intel shares, for their part, finished up 1.7% at $49.13, giving the company a market cap of $208.95 billion. In late July, Intel said it was delaying the release of its 7-nanometer chips (at least late 2022 because of manufacturing issues.
In chip parlance, nanometers, or nm, refers to the size of the transistors that go on a computer chip, with the general rule being that smaller transistors are faster and more efficient in using power. AMD, on the other hand, already sells 7-nm chips, and has spent 2020 releasing more and more versions of them.
In a Tuesday note, Jefferies analyst Mark Lipacis, who has a buy rating on AMD, raised his price target to $95 from $86. Lipacis said the lead of AMD, and its chip fabricator Taiwan Semiconductor Manufacturing Co. (2330.TW) , over Intel appeared "systemic."
Lipacis said he expects AMD share gains to accelerate, especially in the server market, with an estimated 30% share over the next two to three years, and 50% in four to five years. In its recent earnings call, AMD said it had just reached 10% share of the server market.
BofA Securities analyst Vivek Arya, who has a buy rating, had forecast a $100 billion AMD in a Sunday note, after hiking his price target on the stock to $100.
Arya said AMD is well on its way back to its peak market share of 20% of the PC market and 25% of the server market as Intel struggles. On AMD's big upsides, Arya said AMD's PC CPUs are "equally competitive (or in some cases superior) products that still sell at a 15%-45% discount" to Intel's.
Of the 36 analysts who cover AMD, 15 have overweight or buy ratings, 18 have hold ratings, and three have sell ratings, with an average price target of $75.76, according to FactSet data.
For the year, AMD shares are up 85%, while Intel shares are down 18%. Pacing AMD are shares of Nvidia Corp. (NVDA), which are up 91%, valuing the company at $276.20 billion.
Meanwhile, the S&P 500 index is up 2.4% for the year, while the tech-heavy Nasdaq Composite Index is up 22%, and the PHLX Semiconductor Index is up 19%.
-Wallace Witkowski; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
August 04, 2020 16:25 ET (20:25 GMT)
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