Analyst opinions on Advanced Micro Devices (NASDAQ:AMD) are mixed. Last week, Cowen added AMD as 2019’s top pick while Baird and Mizuho lowered their bullishness for the company. Stuck at around $20, will the stock hold that level through January? AMD will reported quarterly earnings later that month.
AMD’s bull/bear thesis is no different from before except for one thing: last quarter’s results were less impressive than before. And the market failed to price in the GPU slowdown. The stock’s plunge from the $30 - $34 Sep-Oct 2018 high is a washout moment that is ultimately healthy for long-time AMD shareholders. It removes the premium in the stock, especially on the GPU space.
EPYC on the server side, GPU cloud computing on EPYC, and Ryzen growth on the notebook and PC space will continue at the same pace in 2019 as it did in 2018. Despite the technical advantages over Intel (NASDAQ:INTC), AMD’s market share growth will be kept in check because of Intel’s pricing power. Intel is pricing its top-end desktop at competitive levels. Power users get fewer CPU cores but better speed. And in the gaming market, that makes Intel’s solution a preferred choice for now.
