Advanced micro-device (AMD) – Get a free report Stocks edged higher on Monday after an upgrade from Barclays looks set to prolong last week’s chip sector rally.
Barclays analyst Blayne Curtis upgraded his AMD rating to ‘overweight’, with a $15 gain from his price target, currently pegged at $85, citing the home market. This chip maker is ahead of rival Intel (INTC) – Get a free report in the server market following the launch of the new data center product Genoa late last year. CEO Lisa Su said Genoa will translate to “lower capex, lower opex, and lower total cost of ownership” for businesses and for cloud data centers.
“Intel won’t have an answer until Granite Rapids/Sierra Forest, slated to launch in 2024 but likely to launch in 2025,” Curtis wrote, referring to the fifth-generation Xeon platform. 6 of this chipmaker and its new, parallel-developed Xeon CPU.
Curtis also said AMD could see the potential for it to profit from the Meta Platform as it ramps up spending later this year.
AMD stock was marked 2% higher in pre-market trading, following Friday’s 3.5% gain, to indicate an opening price of $71.45 per share. The Philadelphia Semiconductor Index, the chip industry’s benchmark, gained 3.11% on Friday to extend January’s gains to about 10.4%.
Late last year, AMD posted modestly weaker-than-expected third-quarter earnings of 67 cents per share, on revenue of $5.6 billion, but recorded solid gains for its businesses. its data center and gaming businesses, partly offsetting further expected weakness in demand for personal computer chips.
However, looking at the last months of the year, AMD says they see quarterly revenue in the region of $5.5 billion, plus or minus $300 million, with gross margins growing to approximately 51% driven by sequential growth for its embedded and data center units. Refinitv estimates are looking for a revenue forecast of around $5.85 billion.
Intel will announce fourth-quarter earnings on Thursday, after the close of trading, with analysts looking for an adjusted number. bottom stream of 20 cents per share with revenue of $14.47 billion.
Last fall, Intel said it saw total revenue in the region of $63.5 billion, down from its previous forecast of $65 billion to $68 billion.
The team also lowered its forecast for PC demand for both this year and next, and detailed cost-reduction plans that it says will save $3 billion by 2023 and an additional $8 billion. to $10 billion by 2025.
