Advanced Micro Devices' Genoa offering raises stakes in battle with Intel: analysts
Andrei Berezovskii

Advanced Micro Devices (NASDAQ:AMD) shares rose in premarket trading on Friday as analysts praised the company's new Genoa server launch as the Dr. Lisa Su-led company increases its pressure on Intel (NASDAQ:INTC) in the valuable market.
Wedbush Securities analyst Matthew Bryson, who has an outperform rating and $100 price target on AMD (AMD), noted that the company could have "mailed it in" with its latest offering but still been competitive with Intel (INTC), but it delivered "significant upgrades" compared to Intel's offerings. 
"In turn, for now this leaves Intel competing against even more robust competition with an Ice Lake platform that struggled to hold share vs. Milan," Bryson wrote in a note to clients. "And while Sapphire Rapids should be more competitive than Ice Lake, we believe it will still fall well short of Genoa on power and performance when it arrives." 
Bryson noted that Genoa has a 14% improvement in instructions per cycle and when compared with its previous Milan chipset, it has a 100% improvement and in some cases, a 200% better performance than Intel's (INTC) Ice Lake CPUs.
And although Genoa needs more energy per server, customers can tweak power consumption up to 400 watts, with performance per watt for Genoa seen as very strong. 
"Milan has a clear advantage vs. Ice Lake in Performance/Watt which AMD pegs at ~32%. AMD suggests with Genoa, this advantage lifts to 54%; in other words, AMD's new parts delivers more than 2X the performance per energy consumed vs. Intel's Ice Lake CPUs," Bryson explained.
Bryson added that the launch of Genoa "reiterated" the firm's view that AMD (AMD) can continue to take "share in servers through 2023 into 2024."
AMD (AMD) shares rose 1.6% to $69.59 in premarket trading, while Intel (INTC) fell more than 2%.
Bank of America analyst Vivek Arya, who has a buy rating and $82 price target on AMD (AMD), noted that the Genoa server processors continue to extend AMD's (AMD) lead over Intel (INTC) with "superior core density, performance per core, as well as efficiency."
The analyst added that Genoa's 64% increase in average selling price over Milan could "discourage" some customers, especially given the current economic environment, but the new chip offers lower spending and operating expenses over other products in the market. 
"Given Intel's product delays and execution shortfalls, we virtually see no threat to AMDâs continued server share gains over Intel for the next few years, and believe AMDâs current 28% server value share could reach 35% share in 2-3 years, or $5 [earnings per share] power by 2024," Arya wrote in a note to clients. 
KeyBanc Capital Markets analyst John Vinh reiterated his overweight rating on AMD (AMD), and pointed out that several "key customers," including Microsoft (MSFT) Azure, Google (GOOG) (GOOGL) Cloud Platform, Oracle (ORCL), HP (HPQ), Dell (DELL) and Lenovo have already provided endorsements for the company and its latest generation processors. 
"With [Intel's] Sapphire Rapids being delayed until mid-next year, we see sustained market gains for AMD in servers through 2023," Vinh wrote.
Separately on Friday, J.P. Morgan moved its rating on Intel (INTC) to underweight with a $32 price target. The firm said that it sees semiconductors rebounding over the next 12-18 months, but Intel (INTC) is likely to participate at a slower pace "due to a combination of competitive pressures, questions on the ability to execute and macro headwinds."
Following its third-quarter results, investment firm Mizuho said AMD (AMD) has continued to see strength from its data center and gaming product lines, despite weakness in its PC unit.