By Emily Bary
But Intel shares downgraded at KeyBanc even though company 'is doing everything a bull would want'
Advanced Micro Devices Inc. has been gaining share, and KeyBanc Capital Markets analyst John Vinh expects that momentum to continue.
He upgraded shares of AMD (AMD) to overweight from sector weight late Monday, writing that AMD still has room to pick up market share, namely as it targets opportunities in the cloud.
"While we were previously concerned about AMD being [able] to sustain outsized growth in data center, recent checks and the inflection seen in our recent cloud data instance tracker are much stronger than we had anticipated," he wrote. "In particular, we see meaningful share gains for AMD at FB and MSFT."
The company boasts "one of the most compelling data-center growth stories given its exposure to cloud and continued market share gains," Vinh wrote.
AMD shares are up 0.2% in Tuesday morning trading.
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Beyond the cloud, Vinh is upbeat about AMD's potential in gaming. While he thinks Nvidia Corp. (NVDA) will stay "dominant" when it comes to gaming graphics, he expects "secular growth" in this area and predicts that AMD could see rising demand.
Vinh is less optimistic about rival Intel Corp. (INTC), and he downgraded shares of the chipmaker to sector weight from overweight. The company "is doing everything a bull would want," but Vinh still doesn't see too many positive catalysts in the near future.
"We have been encouraged by the actions taken by Intel management, which involves investing aggressively in R&D and capex and putting forth an ambitious plan and roadmap that not only brings the company back to parity with AMD but also regains leadership," Vinh wrote, but initiatives like the company's foundry-service business could take longer than he initially expected to play out.
Intel shares are off 0.5% in Tuesday morning trading. The company announced late Monday that it was scooping up Micron Technology Inc.'s (MU) chief financial officer to serve in the same position at Intel.
(END) Dow Jones Newswires
January 11, 2022 10:07 ET (15:07 GMT)
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