Rosenblatt Sees AMD as a Prime Buy, Capitalizing on AI Edge Over Nvidia
Shifting trends in the semiconductor sector position AMD for accelerated growth in 2019, surpassing Wall Street's forecasts, according to a leading analyst.
Advanced Micro Devices Inc. (AMD) continues to capture investor enthusiasm, with shares soaring an impressive 196% as of Wednesday morning, currently trading up approximately 1.1% at $30.42.
In a recent client update, Rosenblatt Securities analyst Hans Mosesmann raised his 12-month price target for the Santa Clara-based chipmaker by 33%, from $30 to $40. This upgrade is driven by AMD’s accelerated deployment of its next-generation 7-nanometer graphics processing units (GPUs) and its manufacturing edge over competitors like Nvidia Corp. (NVDA). Mosesmann’s projection stands as the most optimistic among the 24 analysts covering AMD, according to FactSet and CNBC reports.
Related: AMD Receives Its Most Bullish Rating to Date.
Industry Evolution Signals Faster Growth Than Wall Street Anticipates
"AMD’s recent trajectory and future outlook evoke parallels to Nvidia’s transformation nearly three years ago, when it evolved from a PC graphics company into a computational powerhouse," Mosesmann remarked.
While AMD has historically had a modest presence in artificial intelligence (AI) training and inference markets, its introduction of 7-nanometer Radeon GPUs—arriving six to twelve months ahead of Nvidia’s competing products—is set to disrupt market dynamics in AMD’s favor.
"This shift points to growth in 2019 that will outpace Wall Street’s expectations," noted Mosesmann. The smaller nanometer scale chips enable faster processing speeds and enhanced energy efficiency.
Rosenblatt anticipates that cloud computing providers will adopt AMD’s GPUs as a complementary option alongside Nvidia, attracted by AMD’s distinctive value proposition. The company’s new server processors and graphics units are projected to achieve gross profit margins exceeding 65%.
Supporters highlight AMD’s rapid rollout of next-generation chips, predicting it will seize market share from industry leader Intel Corp. (INTC), which has faced multiple production challenges with its 10-nanometer technology.
Also see: AMD Shares, Up Nearly 200% in 2018, Poised for Further Gains: Jefferies.
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