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Why Is Morgan Stanley Optimistic on AMD Stock?


Jun. 7 2019, Updated 7:38 a.m. ET

Morgan Stanley upgraded AMD stock

On Thursday, Morgan Stanley analyst Joseph Moore upgraded Advanced Micro Devices (AMD) to “equal weight” from “underweight” and raised the price target from $17 to $28 on optimism over the stock.

Moore mentioned that he was wrong on his cautions call on AMD earlier, and now believes that the stock is well set to outperform in 2020 given its strong portfolio of products. Moore believes that the concerns related to its earnings over the past year are over now, and the stock looks good for the second half of the year.

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AMD’s product portfolio

Most recently, the chipmaker announced a multiyear partnership with Samsung Electronics, wherein AMD will get royalty and license fees for licensing its graphics technology to Samsung for use in mobile devices and smartphones.

Last month, AMD unveiled its next-generation 7-nm (nanometer) Ryzen 3000 series CPUs and EYPC server CPUs, which beat Intel’s current 14-nm CPUs. AMD’s Ryzen 3000 series desktop CPUs come under its “Zen 2” range of desktop processors and will be available on July 7. In the Ryzen 3000 series, AMD launched a new CPU, the Ryzen 9 3900X, priced at $499, which delivers 14% better single-threaded performance and 6% better multi-threaded performance than Intel’s 9920X. Other CPUs in the Ryzen 3000 series are two Ryzen 7 and two Ryzen 5 CPUs.

AMD is likely to unveil its 7-nm Navi graphics processing unit soon. AMD also plans to launch the Rome CPU in the third quarter, whereas Intel’s 10-nm server CPU isn’t slated to be rolled out before 2020.

According to CPU Benchmarks, the market share of Intel is declining, while AMD’s market share is gaining momentum.


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