Advanced Micro Devices (NASDAQ: AMD) shot higher Wednesday after one brokerage initiated coverage with a buy rating and said that the company's earnings per share is set for strong growth.
Nomura Instinet highlighted AMD's "high revenue growth and rapidly improving profitability" in validating its steep earnings multiple and new $33 price target.
"We think a return to sustainable profitability will help drive Advanced Micro Device's stock value," wrote one analyst to clients. "We forecast AMD's reported GAAP EPS will climb through 2019 and rise meaningfully in subsequent years from roughly breakeven in the March 2019 quarter."
The analyst added that he expects the profit ramp to be so strong that the company should reach earnings per share power of $2.00 or more. The analyst's price target implies more than 20% upside from Tuesday's close.
On Tuesday, the Santa Clara, Calif.-based AMD joined with HOSTKEY, a leading cloud solutions company representing clients across Europe, Russia and North America, have announced the release of AMD EPYCTM processor-based servers across HOSTKEY’s infrastructure.
"This new deployment of AMD EPYC CPUs offers differentiated features," continues the news release announcing the hookup, "(such as) core-count, connectivity and memory bandwidth to HOSTKEY customers running virtualized environments and high-performance computing workloads."
The release concludes, "For more than 45 years AMD has driven innovation in high-performance computing, graphics and visualization technologies ? the building blocks for gaming, immersive platforms and the datacenter. Hundreds of millions of consumers, leading Fortune 500 businesses and cutting-edge scientific research facilities around the world rely on AMD technology daily to improve how they live, work and play."
AMD shares gained $1.89, or 7.1%, to $28.64 early Wednesday.
