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AMD Hit a 12-Year High After Analyst Gives Bullish Outlook for the Company

Shares of chipmaker AMD have gained roughly 30% last month and as much as almost 150% this year so far.

The stock soared to a new 12-year high after receiving a positive outlook from an analyst and a raised price target from Rosenblatt Securities.

According to Rosenblatt Securities analyst Hans Mosesmann, AMD’s top rival Intel, faces a rough road ahead. The analyst remarked, “There are indicators that Intel may be having problems that look more structural. Shifts in the near term may favor AMD.”

“This is the first time in 10 years I’ve seen significant deep dives by the buyside on AMD,” Mr Mosesmann said.

Research firm Cowen remarked in a note recently, “We are very surprised investors have largely ignored the newest Intel-specific bugs. Our industry conversations are starkly different. We believe fixes to these new L1 Cache vulnerabilities could degrade certain public cloud workload performance by 0-30% and mandate the push for CPU vendor diversification.”

It was at the end of July that AMD reported second quarter results.

“We had an outstanding second quarter with strong revenue growth, margin expansion and our highest quarterly net income in seven years,” said Dr. Lisa Su, AMD president and CEO.

“Most importantly, we believe our long-term technology bets position us very well for the future. We are confident that with the continued execution of our product roadmaps, we are on an excellent trajectory to drive market share gains and profitable growth.”

After the earnings report share prices had hit their highest price in a decade. For the quarter, AMD reported net income of $116 million, or 11 cents a share, compared with a loss of $42 million, or 4 cents a share, in the year-ago period. Adjusted earnings were 14 cents a share. Analysts on average were expecting adjusted earnings of 12 cents a share.

Revenue jumped to $1.76 billion from $1.15 billion in the same period a year ago. It was also higher than the $1.72 billion that analysts expected.

Looking ahead, AMD has forecast for the third quarter revenue of $1.65 billion to $1.75 billion, “driven by the sales growth of Ryzen and Epyc products, partially offset by lower sales of GPU products in the blockchain market.” Analysts were waiting for $1.76 billion.

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