AMD’s 7 nm Technology Lead Makes Analysts Bullish on the Stock

Analysts’ price target for AMD

Advanced Micro Devices (AMD) and Intel (INTC) stocks have been moving in opposite directions after Intel’s former CEO Brian Krzanich said in an analyst interview that the company would likely lose some server processor market share to AMD in the second half of 2018.

Intel has delayed the launch of its 10 nm (nanometer) products until the 2019 holiday season. AMD, however, is on track to launch its 7 nm products on TSMC’s (Taiwan Semiconductor Manufacturing’s) (TSM) manufacturing node by the end of 2018. It would be the first time that AMD would overtake Intel in manufacturing process technology.

That technology advantage has made Wall Street analysts bullish on AMD. Between July and August, Wall Street analysts raised their median price target on AMD from $13.50 to $16.50 and their bullish price target from $27 to $30.

AMD’s 7 nm Technology Lead Makes Analysts Bullish on the Stock

Rosenblatt Securities

According to a CNBC article dated August 23, Rosenblatt Securities analyst Hans Mosesmann raised his price target on AMD from $27 to $30 due to the competitive advantage it would have over Intel with its 7 nm chips. He stated that the 7 nm would give AMD a multiyear advantage over Intel in the CPU (central processing unit) market and a six-month advantage over Nvidia (NVDA) in the server GPU (graphics processing unit) market.

Cowen

Intel’s chips are exposed to several hardware security flaws. Another CNBC article dated August 24, citing Cowen analyst Matthew Ramsay’s note to clients, stated that Ramsay believes these security flaws present an opportunity for AMD in the cloud computing segment.

Intel is the sole server processor supplier for all cloud computing customers. Its exposure to chip-specific security flaws might encourage cloud companies to look for alternatives. AMD could aggressively highlight the security feature in its chips to sell its new server products.

Next, we’ll look at the competition between Intel and AMD.

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