The proverbial time will tell in the coming weeks on whether Advanced Micro Devices (NASDAQ: AMD) topped $16 or will move higher. At 25.6 times forward earnings, AMD is not as attractive as Intel (NASDAQ: INTC) but is still cheaper than Nvidia’s (NASDAQ: NVDA) stock. Intel is valued at 13.6 times forward earnings, while Nvidia is 33 times and at yearly highs. What moved AMD stock last week?
AMD participated at a Taiwan Computex Conference on Tuesday, June 5. The company reaffirmed its technical advantages over Intel CPUs. It will have a process node advantage and scalability that Intel cannot match. Yet the story is the same: Intel has plenty of cash and market share in the CPU market to take its time. Intel’s problem is that it is delaying key product releases, focusing instead in other markets. Its Mobileye acquisition is distracting the company. CPU sales are still a key source of revenue for Intel.
Now that AMD has technologically superior solutions on desktop, mobile and server through its EPYC line, Intel needs to bolster its R&D efforts.
Mosemann, a Rosenblatt analyst, set a $27 PT (price target), a level that exaggerates AMD’s valuation. But if the market is enthusiastic enough, AMD stock might just get there.
