| | | AMD stock is on fire as two more analysts add fuel with price-target hikes
2:06 PM ET 9/4/18 | MarketWatch
AMD stock is on fire as two more analysts add fuel with price-target hikes By Wallace Witkowski, MarketWatch
Chip maker is easily the most heavily traded S&P 500 stock over past 10 sessions
Advanced Micro Devices Inc. is shaping up to be the juggernaut of 2018, as shares surged to fresh highs not seen in more than a decade Tuesday when Wall Street's most bullish analyst on the stock found some company.
AMD (AMD) shares rallied to an intraday high of $28.06 Tuesday, and were last up more than 10% at $27.75 on volume of more than 128 million shares, making it them most heavily traded stock on the S&P 500 index at more than four times the volume of the next most heavily traded stock on the index. The last time shares traded this high was June 7, 2006, when shares hit $29.33, according to FactSet.
Two analysts, Mark Lipacis from Jefferies and Matthew Ramsay at Cowen (http://www.marketwatch.com/story/amd-stock-gains-after-cowen-boosts-target-2018-09-04), both hiked their price targets on AMD to $30, after meeting with AMD execs.
Ramsay, who has an outperform rating on the stock, said Intel Corp.'s (INTC) problems this year have largely benefitted AMD, namely, Intel's delayed rollout of chips and process security issues that appear to have largely targeted Intel chips (http://www.marketwatch.com/story/intel-stock-slips-after-new-disclosure-of-chip-vulnerability-2018-08-14). Intel shares were down 1.3%.
Read:AMD vs. Intel: Balance of chip maker power appears to shift (http://www.marketwatch.com/story/amd-vs-intel-balance-of-chip-maker-power-appears-to-shift-2018-07-27)
Lipacis, who has a buy on AMD, said he believes AMD will ship server chips with a higher transistor density than Intel's "for the first time in recent history, if not ever."
"For most of the past 12 years, Intel has executed near flawlessly, as AMD often stumbled and lost share," Lipacis said in a note. "Intel's manufacturing lead led to smaller, cheaper, lower power and higher performance transistors -- making it nearly impossible for AMD to reverse its share loss."
AMD 7-nanometer server chips are expected to ship in 2019 and by then Intel's most advanced chip will be based on 14-nanometer manufacturing technology, which Lipacis said he considers to be a full generation behind the 7-nanometer tech. Lipacis has an underperform rating on Intel.
In late August, shares rallied to their highest levels in a decade (http://www.marketwatch.com/story/amd-stock-hits-highest-prices-since-2006-as-bullish-analyst-predicts-30-shares-2018-08-23) after Rosenblatt Securities analyst Hans Mosesmann, then Wall Street's most bullish analyst on the AMD's stock, hiked his price target to a Street-high $30 from $27, following two days of meetings with AMD execs, after which the average analyst price target was $17.38. The next highest price target on the stock is $29, according to FactSet.
Now, of the 30 analysts who cover AMD, 13 have buy or overweight ratings, 13 have hold ratings, and four have sell ratings, with an average target price of $18.64, according to FactSet.
AMD has produced profits in each of the last four quarters, after reporting losses in 12 of the previous 14 quarters, and recently reported its highest quarterly revenue since 2008 (http://www.marketwatch.com/story/if-you-didnt-believe-in-the-amd-turnaround-before-these-earnings-should-convince-you-2018-07-25).
Over the past 10 days, AMD shares have had an average daily volume of 131.1 million shares, also the highest average on the S&P 500. Over the past 52 weeks, AMD shares have traded at an average daily volume of 62.7 million shares, the third highest average volume on the S&P 500 behind General Electric Co. (GE) and Bank of America Corp. (BAC), according to FactSet data.
AMD shares are also 2018's best performing stock on the S&P 500 with a year-to-date gain of 170%, crushing short-sellers in the process (http://www.marketwatch.com/story/amd-short-sellers-gutted-by-stealthy-short-squeeze-2018-08-27) following record high short positions as recently as April. Compared with AMD's stellar run for the year, the S&P 500 has gained 8.1% gain, the tech-heavy Nasdaq Composite Index has grown 17% and the PHLX Semiconductor Index has seen a 13% rise.
AMD finished up today at 28.06(+11.5%). |
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