Advanced Micro Devices was upgraded to Overweight from Sector Weight with a $155 price target by analysts at KeyBanc, who said the chipmaker was “poised to benefit from robust cloud data center growth in 2022.”
Rival Intel (ticker: INTC), on the other hand, was downgraded to Sector Weight from Overweight by KeyBanc, which said it sees “limited catalysts on the horizon” for the stock.
Shares of AMD (AMD) rose 4.2% on Tuesday to $137.60. The stock has fallen 4% so far in 2022.
Analysts surveyed by FactSet have an average rating on AMD of Overweight with an average price target of $144.97.
KeyBanc called AMD one of the “most compelling data center growth stories given its exposure to cloud and continued market share gains,” and said it was “one of the most compelling server growth stories in the semiconductor industry given its outsized exposure” to cloud service providers vs. enterprise.
AMD also is expected to significantly outpace cloud industry growth in 2022, the analysts said. They see meaningful share gains for AMD at Meta Platforms
‘ (FB) Facebook and Microsoft (MSFT).
KeyBanc said it expects AMD’s acquisition of Xilinx (XLNX) to “well position the company for the [long-term] transition to heterogeneous compute architectures.”
In late December, AMD said it was pushing back its acquisition of chip rival Xilinx into the first quarter of 2022.
KeyBanc also said it see other growth avenues for AMD, including enterprise computing, GPU computing and opportunities for the chipmaker to continue to gain incremental share in the gaming industry.
As for Intel, KeyBanc said it has been encouraged by recent actions by management, but some of the chipmaker’s initiatives, such as IDM 2.0 and IFS, “we believe will take longer than we had originally anticipated to yield proof points.”
The analysts said they see a fair value on Intel shares of $57.
The stock was rising 1.1% to $55.83 on Tuesday. Intel announced late Monday it had named David Zinsner its new chief financial officer. Zinsner is the current financial chief of Micron Technology (MU). The appointment is effective Jan. 17.
Write to Joe Woelfel at [email protected]
