The Ratings Game: AMD eyes $100 billion market cap as more analysts see market share grab from Intel

The Ratings Game: AMD eyes $100 billion market cap as more analysts see market share grab from Intel

Advanced Micro Devices Inc.’s stock soared to fresh records Tuesday after another analyst hiked his price target on the chip company, driving it to a market cap in excess of $100 billion.


AMD AMD, +8.52% shares spent Tuesday carving out new intraday records, and were last up 8.6% at $84.32, on track for a new closing record. The stock’s intraday high of $85.81 put the company at a market cap of more than $100 billion for the first time, and a close of $85.18 would put AMD just over the $100 billion mark. AMD’s stock last closed at a record $78.20 on July 30, fresh from AMD’s strong earnings and indications that the company’s market share gain from Intel Corp. INTC, +0.93% was quickening.



Intel shares, for their part, were up 0.9% at $48.73, giving the company a market cap of $207.25 billion. In late July, Intel said it was delaying the release of its 7-nanometer chips until at least late 2022 because of manufacturing issues.


In chip parlance, nanometers, or nm, refers to the size of the transistors that go on a computer chip, with the general rule being that smaller transistors are faster and more efficient in using power. AMD, on the other hand, already sells 7-nm chips, and has spent 2020 releasing more and more versions of them.

In a Tuesday note, Jefferies analyst Mark Lipacis, who has a buy rating on AMD, raised his price target on AMD to $95 from $86. Lipacis said the lead of AMD, and its chip fabricator Taiwan Semiconductor Manufacturing Co. TSM, +0.56%, over Intel appeared “systemic.”


Lipacis said he expects AMD share gains to accelerate, especially in the server market, with an estimated 30% share over the next two to three years, and 50% in four to five years. In its recent earnings call, AMD said it had just reached 10% share of the server market.


B of A Securities analyst Vivek Arya, who has a buy rating, had forecast a $100 billion AMD in a Sunday note, after hiking his price target on the stock to $100.


Arya said AMD is well on its way back to its peak market share of 20% of the PC market and 25% of the server market as Intel struggles. On AMD’s big upsides, Arya said AMD’s PC CPUs are "equally competitive (or in some cases superior) products that still sell at a 15%-45% discount” to Intel’s.


Of the 36 analysts who cover AMD, 15 have overweight or buy ratings, 18 have hold ratings, and three have sell ratings, with an average price target of $75.76, according to FactSet data.


For the year, AMD shares are up 84%, while Intel shares are down 19%. Pacing AMD are share of Nvidia Corp. NVDA, +1.13%, which are up 90%, valuing the company at $274.43 billion.


Meanwhile, the S&P 500 index SPX, +0.07% is up 2% for the year, while the tech-heavy Nasdaq Composite Index COMP, -0.09% is up 21%, and the PHLX Semiconductor Index SOX, +0.87% is up 18%.