Advanced Micro Devices Inc (AMD)

[DiscoverGold]

AMD Higher as Goldman Upgrades to Buy on Valuation
By: TheStreet | November 4, 2020

• AMD "presents a compelling opportunity to participate in a multiyear share gain and margin expansion story,” Goldman said, upgrading the stock.

Advanced Micro Devices (AMD) shares rose on Wednesday after Goldman Sachs upgraded the semiconductor maker’s shares to buy from neutral and added them to Goldman’s Conviction List.

Goldman analysts acted based on AMD’s valuation. The stock has dropped 13% since Sept. 1.

It recently traded at $80, up 4.5%. It had risen 4% year to date through Tuesday.

Goldman analysts lifted their share-price target to $96 from $84.

The recent slide “presents a compelling opportunity to participate in what we expect to be a multiyear share-gain and margin-expansion story,” the analysts wrote in a commentary cited by Bloomberg.

Goldman’s research points to “strong [personal-computer] fundamentals” through the first half of next year and “design win/share gain momentum [for AMD] in the client and commercial PC space,” Goldman said.

Morningstar analyst Abhinav Davuluri also expressed enthusiasm for AMD after its earnings report last week and news of its agreement to buy chipmaker Xilinx (XLNX) - Get Report for $35 billion.

“We are raising our fair value for AMD to $67 per share on a probability-weighted basis,” he wrote in a commentary.

“We assess AMD’s stand-alone [minus Xilinx] fair-value estimate at $57 per share, up from our prior $31 estimate.”

As for Xilinx, “we like the deal for AMD, as it is using its rich shares to fund the deal,” Davuluri said.

“We view this deal as a way for AMD to bolster its product portfolio with the leading FPGA [field-programmable gate array] franchise to drive growth and better diversify its revenue, as Xilinx products are complementary to AMD.”

Read Full Story »»»

DiscoverGold