AMD Set to Triple Market Share Amid Intel's Production Challenges
Jefferies predicts AMD’s market share could soar to 30% due to Intel’s ongoing manufacturing setbacks, while the broader market currently estimates only a 15% share.
Advanced Micro Devices Inc. (AMD) has captured significant attention on Wall Street, with its stock soaring over 211% year-to-date (YTD).
(For additional insights, see: AMD Positioned as a Top AI Contender Over Nvidia: Rosenblatt.)
In a recent client briefing titled "Intel Supply Bottlenecks = Significant Gains for AMD," Jefferies raised AMD’s price target from $30 to $36, reflecting a potential 12.3% increase from the $32.06 price on Monday morning, according to CNBC.
Market Underestimates AMD’s Potential, Forecasting Only 15% Share
Analyst Mark Lipacis, who maintains a buy rating on the Santa Clara-based chipmaker, attributes his positive outlook to Intel Corp.'s (INTC) difficulties scaling production of its next-gen 10-nanometer processors. Lipacis projects AMD’s market share could jump from 10% to 30% amid Intel’s struggles.
"If our evaluation of AMD’s transistor technology advantage in 2019 holds true, and Intel’s supply constraints persist into mid-2019, a 70/30 market split is plausible," Lipacis stated, highlighting that the market currently undervalues AMD by factoring in only a 15% share.
Jefferies referenced research from Fubon, which forecasts that HP Inc. (HPQ) will integrate AMD processors into up to 30% of its consumer PC lineup in 2019, while Dell Technologies Inc. plans to increase AMD chip usage within its commercial PC segment.
"Fubon’s analysis indicating Intel will fall short in supplying the PC market from Q4 2018 through Q2 2019 strengthens our confidence that AMD will soon report growth in revenue, pricing, and margins, positioning it to capture substantial share in the premium PC MPU and server markets over the long term," the bullish analyst added.
AMD, the top-performing stock in the S&P 500 during 2018, has recently been highlighted by several analysts for its competitive momentum against Intel. Last week, Stifel analysts boosted their AMD price target by more than 80% to $38, citing robust demand for AMD’s latest products, effective management execution, and a delayed competitive response from Intel.
(See also: AMD Could Jump Over 20% on New Product Launches: Stifel.)
If you have news tips for Investopedia reporters, please contact us at tips@investopedia.com.
Explore useful articles in Company News as of 29-09-2018. The article titled " AMD Set to Triple Market Share Amid Intel's Production Challenges " offers in-depth analysis and practical advice in the Company News field. Each article is carefully crafted by experts to provide maximum value to readers.
The " AMD Set to Triple Market Share Amid Intel's Production Challenges " article expands your knowledge in Company News, keeps you informed about the latest developments, and helps you make well-informed decisions. Each article is based on unique content, ensuring originality and quality.