Things are looking up for Advanced Micro Devices, Inc. (NASDAQ:AMD), according to one Wall Street firm. Bank of America Merrill Lynch has reiterated its buy rating while kicking its price target for AMD up several notches.
CNBC passes along the firm’s take on AMD.
AMD’s market share in the server and desktop chip market will surge in the next two years, according to Bank of America Merrill Lynch.
The firm’s analyst, Vivek Arya, raised his price target for the company’s shares to $20 from $17, representing 27 percent upside to Friday’s closing price. He said AMD will likely generate higher profit margins from its new products.
Arya explained that AMD is one of the firm’s top small- and mid-cap stock pick. He provided some additional insight in a note to clients.
“We believe the street continues to underappreciate the pricing/GM [gross profit margin] upside from AMD’s mix-shift to newer Ryzen and EPYC server products, which can more than offset any risk from graphics cards sold to crypto miners,” he wrote. “Execution is key, and Intel’s incumbency and resources cannot be taken lightly, but we believe AMD has a generational opportunity to become materially bigger in computing.”
Advanced Micro Devices, Inc. shares were trading at $14.93 per share on Monday morning, down $0.87 (-5.51%). Year-to-date, AMD has gained 45.23%, versus a 2.53% rise in the benchmark S&P 500 index during the same period.