> Hans [Mosesmann] raises PT from $42 to $52.
The raised stock price target is based on continued growth projections into 2021:
You mentioned that you think "we will max out somewhere in your "stable" range around Q3 next year". I presume you then think AMD will fall back. Do you think Intel will come back at that point and put AMD back in my "precarious" or "pessimistic" scenario? Or do you simply find it hard to picture and predict AMD's future beyond that point?
| AMD longterm prospects (5-10 years) |
| Market cap. | Stock price | Likelihood | | Pessimistic: Fades away, overtaken by competitors |
| <$20B | <$20 | 10% | | Precarious: Stays an underdog, fighting at current levels |
| $20B-40B | $20-40 | 20% | | Stable: Respected competitor, solid profitability and market share |
| $40B-100B | $40-100 | 40% | | Optimistic: Matches Nvidia size business, best-in-class profitable niches |
| $100B-200B | $100-200 | 20% | | Pie-in-the-sky: Overtakes competitors, exclusive innovation/markets |
| $200B+ | $200+ | 10% |
I can see no likely reason why AMD should be overtaken in architecture nor manufacture to any extent repeating history. Intel still has no roadmap that poses any obvious threats. In manufacture, they will have to perform a miracle to overtake TSMC. Which is contrary to the cautious approach Bob Swan has stated they will take with 7nm, and learning from the overambitious targets for 10nm. In architecture, it is mostly about chiplets and packaging technology going forward, and AMD seems well placed (see TSMC's keynote presentation at HotChips). Intel's Foveros technology seems to be more aimed at the low-power mobile sector where Lisa Su explicitly states that AMD is not playing — instead focusing on HPC.
So why should we expect a downturn for AMD towards the end of 2020? Next year AMD's product range, EPYC and new consoles in particular, will gain material momentum. It is hard to see that momentum disappear into 2021, even before Intel has started ramping 7nm product, which will start with GPU in 2021, with next-generation 7nm CPU ramp not expected until 2022 at the earliest. |
