By Senad Karaahmetovic
Advanced Micro Devices (NASDAQ:AMD) is trading over 3.5% higher in pre-open Monday after shares received two upgrades.
With shares down more than 50% year-to-end (YTD) based on Friday’s closing price, despite the recent 30% rally off the lows, analysts are turning more bullish given the attractive valuation.
UBS analysts upgraded AMD stock to Buy as they see key cycle indicators turning more positive. The analysts remind clients that compute “typically out-performs off the bottom.”
“The PC segment has been early in digesting inventory and been dragging down growth, but overall CPU shipments are annualizing to ~230MM units in CQ4 - far below even the most bearish market forecasts for PCs in 2023 and suggesting some replenishment moving through '23,” the analysts said in a client note.
Baird analysts raised AMD stock to Outperform as recent supply chain checks showed new Genoa data center processors received a warm welcome. The price target is raised to $100 per share from the prior $65.
“Genoa's very significant performance step up should translate into an acceleration in market share gains for AMD in 2023, along with significantly higher pricing and a higher gross margin profile, reinforcing AMD's EPYC performance leadership for years to come,” the analysts wrote in an upgrade note.