AMD's Market Share Soars To Compete With Intel, Wall Street Analysts Believe Very Prospects

JAKARTA - A Wall Street analyst upgraded Advanced Micro Devices (AMD) to a buy rating after 10 years on Tuesday, February 22. It highlights its growing market share, and has a strong portfolio of computer chips to rival Intel and its relatively low stock price.

"This is not AMD a decade ago," said Bernstein Research analyst Stacy Rasgon, lifting the brokerage firm's rating to "outperform" - its highest-ranking stock - from "market performance".

According to Bernstein, AMD's market share for laptop central processing unit (CPU) chips has now risen nearly 20% in the third quarter of 2021 from a low of under 5% six years ago, citing data from Mercury Research and its own analysis.

"The quality of AMD's portfolio continues to improve ... AMD's desktop CPUs are now, on average, on par with Intel's," said Rasgon.

AMD's own stock has ballooned from around $2 when Bernstein last got an "outperform" rating on them in 2012 to around $114 today. The hike is what Rasgon called "the absolute biggest missed call in our entire Wall Street tenure."

AMD shares were slightly lower in premarket trading on Tuesday, but the chipmaker's market value outpaced Intel's last week.

However, AMD's share price is currently below 30 times projected earnings for the next 12 months, with the stock near its lowest price in five years. "This stock is getting into a really interesting realm," said Rasgon.

Recent comments from Intel suggest the next few years may be the "open season" in the major data center markets. This is another positive for AMD.

AMD could also get more revenue from its recently closed $50 billion Xilinx acquisition than previously thought. "Our math shows the company may see annual revenue levels that could be hundreds of millions of dollars higher than current expectations," Rasgon said.